US soy futures rise on renewed supply woes

US soy futures rose on Thursday (Apr 30), extending gains after their biggest one-day rally in a month as the latest Argentine output estimates renewed concerns of tight supplies.

 

Corn and wheat fell half a percent following strong gains triggered by wet weather delaying plantings in the US.

 

The Buenos Aires Grains Exchange estimated this year's Argentine soy crop at only 34 million tonnes, down from its previous estimate for 36.2 million due to a drought, a massive reduction of more than 12 million tonnes from last year's crop of 46.2 million tonnes.

 

Argentina, the world's third largest exporter of soy, is also the biggest supplier of soyoil and soymeal.

 

The soy market is recovering from a big sell off on Monday (Apr 27) when outbreak of a deadly swine flu raised concerns over pork consumption.

 

Despite the name "swine flu", the new strain has not been detected in pigs and health officials say consumers could not contract the virus by eating pork.

 

The World Health Organisation (WHO) said the world is at the brink of a pandemic, raising its threat level as the swine flu virus spread and killed the first person outside of Mexico.

 

Agricultural Commodity Strategist Doug Whitehead said that with outlook for old crop soy stocks so tight, it is quite impossible to justify prices under US$10 a bushel.

 

Whitehead noted that even in such a strong session, growers were hoarding their soy for prices to move higher.

 

Soy for May delivery rose 5 cents, or 0.5 percent, to US$10.39 per bushel after surging 44-½ cents on Wednesday (Apr 29).

 

Corn and wheat lost some of the strong gains as the markets paused for a breather.

 

May corn fell half a percent to US$3.90-¾ per bushel and wheat for May delivery also fell by a similar amount to US$5.18-½ per bushel.

 

Corn climbed more than 4 percent on Wednesday (Apr 29), while wheat gained nearly 2 percent.

 

Excessive wet weather in the US is posing a threat to this year's corn and spring wheat crops, both of which are lagging behind the normal planting pace.

 

US farmers try to plant their corn crop from roughly mid-April through mid-May to attain optimum yields.