The price of soybean futures surged on Tuesday, as China purchased larger quantities of soybean oil in response to rising domestic demand for vegetable oils.
Soybean futures closed at $10.52 per bushel, up 17 cents, at 1:15 p.m. EST on the Chicago Board of Trade, reported Bloomberg News. According to the U.S. Department of Agriculture, China will import 9.95 million tons of soybean oil in the next marketing year. That represents an increase of 15 percent from the forecast for this year.
The surge in price will benefit U.S. soybean farmers, although they have to compete in price with the world's largest producers of the commodity: Argentina and Brazil.
"U.S. crushers discounted prices to make sales," Roy Huckabay, the executive vice president of the Linn Group in Chicago, told Bloomberg. "China needs more vegetable oils and the sales this past week signal that U.S. supplies are the cheapest in the world right now."
There's also concern that U.S. production of soybeans may be lower than expected; Bloomberg/BusinessWeek reported on Monday that the crop could fall short of the 3.43 billion bushels predicted by the USDA.
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