January 10, 2012

Soy futures on the Dalian Commodity Exchange rose slightly Monday (Jan 9) amid forecasts that dry weather would hurt crops in Brazil and Argentina, the world's second- and third-largest exporters, respectively.

The most actively traded September soy contract settled 0.1% higher at RMB4,348 (US$689)/tonne.

Agricultural analyst Informa Economics on Friday lowered its projections for soy this year in Brazil and Argentina due to persistently hot, dry weather.

It trimmed its estimate for Brazil's soy crop to 72 million tonnes, down 1.6 million tonnes from its December estimate. The USDA in December estimated Brazil's crop at 75 million tonnes.

Informa projected Argentina's soy crop at 51 million tonnes, below the USDA's December estimate of 52 million tonnes and its own December forecast of 53 million tonnes.

China's soy futures hit a seven-week high last week, reflecting persistent concern that weeks of hot, dry weather in South America, especially Brazil and Argentina, was threatening soy and corn crops.

China's demand for imported soy remains weak, partly due to losses suffered by domestic crushers over the past 11 months, the state-backed China National Grain & Information Centre said Monday. The government's sales of large amounts of edible oils and soy from state reserves also weakened import demand last year, analysts said.

As of December 29, China had purchased 16.94 million tonnes of US soy in the current marketing year ending August 31, down 33.5% from a year earlier, a USDA report said.