US soy future eases from 7-month high on declining China concern

US soy futures on Monday (May 11) eased slightly from seven-month highs set late last week on concerns about waning demand from China, which has fuelled a run-up in prices during the past few months.

 

But trading was choppy as traders scrambled for positions ahead of the US Department of Agriculture (USDA) May supply and demand and winter wheat production report to be released early Tuesday (May 12).

 

Falling outside markets such as lower crude oil and equities, pressured or limited gains in soy, corn and wheat futures prices at the Chicago Board of Trade (CBOT).

 

Corn futures were narrowly mixed in consolidation trade and wheat was mixed, with spot May gaining on short-covering before Tuesday's USDA reports.

 

US soy for May delivery was down 4 cents per bushel at US$11.30, May corn was down 1/2 cent at US$4.13-1/2 and wheat for May was unchanged at US$5.80-1/2.

 

Although the spot May soy futures contract eased, most other trading months were firm on fund buying, tight supplies of soy and a lack of export sales of soy from drought-stricken Argentina, the world's third largest soy exporter.

 

News of the first case of the AH1N1 flu in China created a bit of cautious trading atmosphere, and generally acted as a bit of an anchor on grain and soy markets.

 

China's soymeal prices traded down due to the first AH1N1 flu case reported on Monday (May 11).

 

Traders said China already was poised to reduce buying of soy for July and August shipments, after booking a record 5 million tonnes for May and more than 4 million tonnes for June.

 

Last week, soy surged to their highest level in seven months, on relentless Chinese buying and a drought reducing soy output in Argentina.