DJ WSJ(3/12) Commodities Report: Soybeans Sink Thursday
(From THE WALL STREET JOURNAL)
By Andrew Johnson Jr.
Soybean futures tumbled to one-month lows, dragged lower in part by
disappointing U.S. government export-sales data that showed China had canceled
Concerns about tightening monetary policy in China and potentially record
soybean crops in South America also contributed to the declines.
The nearby March soybeans contract fell 26.5 cents, or 2.8%, to $9.255 a
bushel on the Chicago Board of Trade. May, the most-actively traded contract,
settled 27.5 cents, or 2.9%, lower at $9.305.
Soybean export sales for the week ended March 4 were a net reduction of
115,800 metric tons, the U.S. Department of Agriculture reported on Thursday.
China canceled 192,400 tons of previous purchases for the current 2009-2010
crop year, and that was more than enough to offset small sales to other
countries such as Mexico and Japan. Analysts said the net reduction in export
sales was a signal that soybean buyers are moving away from U.S. supplies and
are instead buying soybeans from South America.
In addition to the Chinese cancellations, traders also worried about monetary
policy in the country, which is the top global importer of soybeans.
China's February consumer-price index accelerated from the year-earlier
month, to a greater-than-expected pace of 2.7%, driven by a jump in food
Prices were pressured by the combination of net export-sales reductions and
fears that China's efforts to curb inflation through credit tightening will
slow the nation's buying of soybeans, said Bill Nelson, analyst with Doane
And then there is export competition from South American soybeans.
The soybean harvest is currently ongoing in Brazil, the world's No. 2
producer behind the U.S. Earlier this week, Brazil's National Commodities
Supply Corp. estimated the current soybean crop at 67.5 million tons, which if
realized, would be a record harvest.
Conab, which is part of Brazil's Ministry of Agriculture, said good yields
and favorable rains in Brazil's main soy-producing regions helped to lift
However, traders said despite the losses, the market remains within a wide
near-term trading range. Concerns about two-week delays in loading supplies at
Brazilian ports and a tight U.S. balance sheet provide underlying support.
Earlier this week, the USDA reduced its estimate of U.S. soybean ending
stocks -- essentially the surplus -- to 190 million bushels, down from 210
million estimated last month.
Anthony Danby in Sao Paulo contributed to this article.
In other commodities-markets trading on Thursday:
NATURAL GAS: Futures slid after U.S. government data showed a normal-sized
withdrawal from storage last week that left inventories of the fuel slightly
above average as warmer spring weather approaches. Gas for April delivery on
the New York Mercantile Exchange settled 11.9 cents, or 2.6%, lower at $4.44 a
million British thermal units.
COPPER: Futures ended near steady as investor bargain-hunting and some
support from a series of earthquakes in the world's largest producing nation
were offset by concerns that China will move to curtail inflation by limiting
growth. The thinly traded nearby Comex March copper contract rose 1.1 cents, or
0.3%, to settle at $3.3660 a pound.