February 27, 2009

US soy futures extended their pullback on Thursday (Feb 26) on signs of slackening Chinese demand and before data expected to point to US farmers planting more soy next season.

 

The battle for acres between soy and corn will be highlighted at the USDA's annual outlook conference that gets underway in Arlington, Virginia, later on Thursday.

 

Unipac Grain in Tokyo president Nobuyuki Chino said that it is likely that American farmers will plant bigger soy crops this year because prices are better.

 

CBOT soy for March delivery eased 0.68 percent to US$8.72 per bushel, while corn for March delivery rose 0.34 percent to US$3.65.

 

Wheat for March delivery edged down 0.67 percent to US$5.21, 1/4 per bushel.

 

Trading in European wheat was hesitant, with operators weighing up the prospect of big ending stocks against a lack of selling by producers in the short term.

 

March wheat edged up 0.36 percent to EUR140 a tonne, while the benchmark May contract also added 0.36 percent to reach EUR140.50 after testing support at EUR139.50 earlier in the session.

 

A European trader said farmers are reluctant to sell the remainder of their grain, also stressing that unsold stocks in France were "substantial".

 

Export worries continued to cap both European and US wheat prices in view of the competitiveness of Russian grain.

 

Operators in Europe said it will be a tall order for French grain to win business in a tender being held by Algeria for 300,000 tonnes of wheat.

 

Traders added that the deadline for bids is this weekend and that Algeria is seeking shipments of 75,000 in the second half of May, followed by 125,000 tonnes in the first half of June, and then 100,000 tonnes in the second half of June.

 

Traders also said the country is traditionally a big buyer of French wheat but Russian grain could be in the running currently.