Soybeans fell the most in two weeks on speculation that rising production in South America will erode demand for supplies from the U.S., the world’s leading exporter.
Combined crops this season in Brazil, the second-biggest shipper, and Argentina, the third-largest, will jump 35 percent, the Department of Agriculture said this month. Global stockpiles will surge 44 percent to the second-highest amount ever before the U.S. harvest begins, the agency said. Soybeans in Chicago have dropped 10 percent this year.
"U.S. exports should slow quickly with harvesting moving ahead" in South America, said Jim Riley, a market analyst at the Linn Group in Chicago. "The market focus remains on the big crops."
Soybean futures for May delivery fell 17.5 cents, or 1.8 percent, to $9.425 a bushel on the Chicago Board of Trade, the biggest decline for a most-active contract since March 11.
The price also fell on concern that trade tensions will escalate between the U.S. and China over the value of the Asian currency, said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago.
There is a 50 percent chance that the U.S. will label China a currency manipulator, New York University professor Nouriel Roubini said in a report to clients.
"People are nervous about a confrontation leading to a drop in soybean exports" to China, the leading buyer, Gidel said. "There will be plenty of supplies available from South America."
China canceled purchases of 65,000 tons for delivery after Sept. 1, the USDA said today. No new sales from inventories were reported for delivery before that date.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show.
Source: Business Week
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