January 7, 2008

Grain prices slide as report show letup in demand

Soy prices on the CBOT, which climbed to a 34-year high last Thursday ( Jan 4, 2007) after oil prices hit US$100, continued to slide for the second day as a government report showed a slide in demand due to high prices.

The slide in soy prices also brought down corn and wheat futures, which climbed to multi-year highs last week. 

US soy exports in the week ended Dec 27 fell 79 percent from the previous week and was the lowest for the marketing year starting Sept 1, the USDA report on Jan 4 said.

Soy for March delivery retreated after reaching US$12.78 a bushel on Jan. 4, the highest since June 1973. The contract fell 7.25 cents, or 0.6 percent, to US$12.5525 a bushel in after-hours electronic trading on the CBOT.

Soy futures jumped 78 percent last year, a record annual increase, as rising corn demand prompted more farmers to give up soy in favour of planting corn.

Meanwhile corn for March delivery declined 3.5 cents, or 0.8 percent, to US$4.6325 a bushel.

On Jan. 2, the price reached $4.695, the highest for a most-active contract since June 1996.

Corn futures gained 3.3 percent last week, extending a rally for a fifth week on demand for grain-based ethanol and livestock feed.