January 17, 2011

CBOT soy climbs, supply concerns renew trade

US soy futures ascended Friday (Jan 14), with supply concerns lifting prices to new two-year high settlements.

CBOT March soy, the most active contract settled six and a half cents or 0.5% higher at US$14.22 and a half.

Soy prices traded in both positive and negative territory, with prices staging a late bounce on speculative led buying. The bullish influence of end-of year inventories projected at minimal levels to make it through the marketing year, and longer range weather forecasts calling for dry Argentina weather provided support to erase earlier price weakness, said Tim Hannagan, analyst with P.F.G. Best, a brokerage firm in Chicago.

The market traded both bullish and bearish news, but traders are still pricing in comparisons to 2008, with the battle for needed acreage and demand rationing that sent prices to all-time highs that year serving as benchmarks for prices, Hannagan added.