January 19, 2011

CBOT soy rises as rains miss Argentina's dry growing regions

CBOT soy  has increased on Tuesday (Jan 18), for the fourth consecutive time on assumption that recent rains in Argentina, which is the biggest shipper of animal feed, had alleviated its soil-moisture deficits.

Around 4 inches (10 centimetres) of rain affected some areas in the past three days, with much lighter amounts in the central growing region, which received less than 40% of normal precipitation the past 45 days, Martell Crop Projections said today.

Temperatures in some places will top 100 degrees Fahrenheit (38 degrees Celsius) the next five days, increasing crop stress.

"Rains in Argentina missed the main growing region," said Alan Kluis, the president of Northland Commodities LLC in Minneapolis. "Soil-moisture deficits and hot weather this week will begin to cut yield potential."

Soy futures for March delivery rose 4 cents, or 0.3%, to US$14.265 a bushel at 10:21 am on the Chicago Board of Trade. The last time the commodity rallied for at least four days was in late December.

The most-active contract reached US$14.325 on January 13, the highest since July 2008, after the US government reduced its estimate of last year's crop and its forecast for reserves before the 2011 harvest.

The 2009 US soy crop was valued at US$31.8 billion, second only to corn at US$48.6 billion, according to USDA.