US soy futures fall amid strong Chinese demand

Traders said China, the world's top soy importer, could turn to the US for soy supplies if the farmers' strike in Argentina, the third highest soy exporter, was extended.

Analyst Toby Hassall said that the strike is pretty much priced into the market but if it were to drag on that would affect Chicago prices, particularly for soy.

Thursday's release of weekly US export data from the USDA is likely to show continued Chinese buying of US beans even though at this time of the year China usually turns to freshly harvested crops in Brazil and Argentina for supplies.

CBOT soy for May delivery fell 0.51 percent to US$9.63 1/4 per bushel after rising about 10 percent since the start of last week to hit 5-week highs.

Waning enthusiasm about the plan to cleanse banks in the US of toxic assets saw the US dollar rise on safe-haven buying, putting further pressure on US dollar priced commodities as a stronger US currency makes them more expensive for offshore buyers.

The looming March 31 USDA report, containing planting estimates for US crops including corn and soy, was also influencing trading.

Hassall said traders are not willing to take a big position either side ahead of the March 31 USDA reports.

Many analysts expect US farmers will seed about 2 million less acres of corn than the 86 million planted last spring, while soy acres could be up as much as 5 million from the 75.7 million planted in 2008.