April 20, 2009

US soy futures rose half a percent on Monday (Apr 20), extending last week's strong gains, as China's huge appetite and concerns over Argentine supplies continued to support the market.

 

But corn dropped 1 percent to a five-week low on better planting weather in the US and weakening crude oil prices.

 

Analyst Toby Hassall said that strong demand is underpinned by China and that continues to be the primary driver for soy.

 

The front-month soy contract rose to six-month top of US$10.73 per bushel last week, but it gave up some of those gains on Friday (Apr 17) as the market ran into technical resistance, hitting a key 200-day moving average of US$10.71-A¼ per bushel.

 

Traders said that China, booked a total of 10 to 15 cargoes or up to a million tonnes of US and Brazilian soy last week.

 

They also said that China will extend state purchases of domestic soy in two months beyond the scheme's planned April expiry, a move that could keep imports at the near record levels.

 

Poor soy production in Argentina and political unrest between the government and farmers was also a key driver in the soy market.

 

CBOT May soy rose US$0.04-A¾ to US$10.55-A¾ per bushel after dropping US$0.07-A½ in the previous session.

 

But China's Dalian soy fell on Monday (Apr 20), ignoring gains on the benchmark CBOT on concerns over the procurement of moisture-laden beans.

 

Corn futures eased due to better corn planting weather in the US which will help boost production prospects for the 2009 corn crop.

 

May delivery corn fell 1 percent to US$3.72-A¼ per bushel, the lowest for front-month since March 12, 2009.

 

Wheat for May was down 1 percent at US$5.18 a bushel, weighed down by weakness in corn and lower crude oil prices.

 

Wheat production in Australia, one of the world's top exporters of the grain, for the year to June 2010 is seen at 21.2 million tonnes, National Australia Bank Ltd said in a report on Monday, down about 1 percent on the previous season.