April 24, 2009

US soy futures rose for a third day on speculation that drought in Argentina will cut production there and on China's announcement that it will extend a plan to stockpile the oilseed.

Soy for July delivery gained US$0.115, or 1.1 percent, to US$10.505 a bushel in electronic trading on the Chicago Board of Trade (CBOT).

The Buenos Aires Cereal Exchange cut its forecast for this year's soy harvest by 2.2 percent to 36.2 million tonnes as figures on newly harvested crops showed lower yields. China will lengthen a plan to build a 6 million-tonne soy stockpile by two months.

Weather analysis company Storm Exchange Inc. said the combination of drought with increased soy demand in China continues to spur a soy rally.

July-delivery wheat slipped 0.1 percent to US$5.2575 a bushel, the equivalent of EUR148.40 (US$194.956) a tonne, while Euronext milling wheat for May delivery climbed 0.4 percent to EUR144 (US$189.176) a tonne.

Senior trader Campbell Roydhouse said US prices are overvalued against EU and Russian competition and will have to fall to capture much-needed demand.

Corn for July delivery slipped 0.1 percent to US$3.8225 a bushel. The most-active future has dropped in four of the past five sessions.

Planting in the main US corn region is expected to accelerate as weather improves in coming weeks.

Senior meteorologists said that farms from eastern Iowa to Ohio, estimated to account for half of this year's 85-million-acre corn crop, will have sunny and warm weather over the next two to three weeks after rains made fields too muddy for machinery and delaying planting.