April 11, 2008

 

US soy prices surge anew on cheap dollar, unrest in South America

 

 

The US soy prices increased by over 2 percent on Thursday, driven by large exports and the industry's anticipation for strong global demand due to record lows of the dollar value and the labor issues in South American grain ports.

 

The US industry is optimistic that it can absorb South America's soy business overseas.

 

The US is currently the world's largest soy exporter, followed by Brazil and Argentina.

 

Brazil's soy market has lately been slowed by strike of workers at the Paranagua port.

 

Meanwhile, Argentina grain farmers have announced to meet with the president on Friday to discuss possible agreements on the much-protested raise of grain export tariffs.

 

Argentine farmers had been on strike, then called a 30-day moratorium to negotiate with the government, yet soy traders remained uneasy.

 

A spokesman for one of Argentina's farming groups said it was unlikely that the strike would resume within a 30-day moratorium they declared last week.

 

A Japanese trader said that the uncertainty in Argentina is pushing up the old crop, while the new crop is also very strong, catching up with gains in corn prices.

 

Soy for May delivery was up nearly 30 cents per bushel and trading around US$13.40 per bushel.

 

Soy oil also gained over 2 percent after the US government's increased estimate on the soy oil to be used for biodiesel.

 

Corn prices were volatile on Thursday with the market buffeted by profit-taking pressure after surging to record highs on Wednesday.

 

However, bullishness remained because of wet and cold weather in the corn producing areas of the United States.

 

A Goldman Sachs research report released on Thursday forecast an upward revision of corn prices to US$7.25 per bushel in six months.