US soy futures rise to six-month high on strong Chinese demand

US soy futures rose for the sixth straight session on Thursday (Apr 16) to their highest level in six months as robust demand from China continued to bolster the market.

 

Corn and wheat also firmed, following the strength in soy.

 

Commodity Warrants Australia analyst Toby Hassall said that the grains are really benefiting as the country has a little bit of weakness in its dollar and oil prices are rebounding following some recent falls.

 

Hassall said that US has seen very strong import demand from China for their soy stockpiles and that there are no indications that demand is waning.

 

CBOT May soy futures contract rose 7-¾ cents to US$10.42-¾ per bushel after touching a high of US$10.48, a level not seen since October 2, 2008. May corn gained 3-½ cents to US$3.88 per bushel.

 

May wheat rose 3-¾ cents at US$5.19 per bushel, ending two straight days of decline.

 

Traders in China said the country's steady imports of US and Brazilian soy are likely to continue, given better crushing margins.

 

Chinese analyst Song Yang said that the demand for imported soy will be strong and at higher levels for the near term, as the cost for imports is still lower than domestic prices.

 

Crushing margins in China ranged between RMB200 and RMB300 per tonne as compared to negative margins in February.

 

China, the world's biggest soy importer, bought 3.86 million tonnes of soy in March, a rise of 66.6 percent from a year earlier and the second highest monthly tally.

 

This year China is not buying much of its soy from Argentina as unrest between farmers and the government has caused concerns over supplies.

 

The most-active January contract on China's Dalian futures exchange was up half a percent, following strength in Chicago market, the global benchmark.

 

US$1 = RMB6.831 (Apr 16)