US soy extend rally as dollar drops, boosting investor demand

Soy climbed for a second day as the US dollar extended losses, increasing the appeal of commodities as an alternative investment.

Futures in Chicago gained as much as 0.6%, extending a 1% advance on March 26. The euro strengthened as much as 0.9% against the dollar as a EU aid package for Greece boosted confidence in the region's assets.

May-delivery soy gained as much as 6 cents to US$9.58 a bushel on the CBOT and were at US$9.57 at 2 p.m. in Singapore. The price dropped 1% last week, the third decline in four weeks, on forecasts for increased planting in the US and record harvests in South America.

The euro strengthened to US$1.3430 at 2:03 p.m. in Tokyo from US$1.3410 in New York on March 26. A weaker dollar boosts demand for US supplies from importers holding other currencies.

According to analysts, despite a tight US old crop supply situation, record South American soy production and the prospect of another huge US crop in 2010 are casting an increasingly bearish hue over the soy market.

Meanwhile, wheat for May delivery gained for the first time in five days, rising 0.8% to US$4.6825 a bushel. The price touched US$4.64 on March 26, the lowest level since October 9. The grain dropped 3.9% last week, the fourth straight weekly loss.

Corn for May delivery was little changed at US$3.565 a bushel. The contract lost 4.9% last week, touching US$3.54 on March 25, the lowest level since February 8.