May 12, 2010

US soy and corn futures rise as farmers reduce sales

Soy and corn futures rise as farmers halted sales to wait for higher prices on optimism that demand will improve, according to USDA.

The spot-basis bid, or premium, for soy deliveries this month was US$0.40-US$0.50 a bushel above July futures in Chicago, up from US$0.40-US$0.44 yesterday, government data show. The premium for corn was US$0.47-US$0.49 above July futures.

Soy futures for July delivery rose 0.5% to US$9.66 a bushel on the Chicago Board of Trade. Corn futures for July delivery climbed 1.8% to US$3.77 a bushel, the highest closing price for the most-active contracts since March 4.

"Rising domestic demand for corn and soy to make food, animal feed and fuel is helping to reduce the supplies left over from last year's harvest that are moving to export terminals," said Scott Stoller, a grain merchandiser at Michlig Agricenter Inc. in Manlius Illinois.

Unsold corn inventories by August 31, the end of the marketing year and before this year's harvest, will total 1.738 billion bushels, compared with 1.899 billion forecast in April and 1.673 billion on hand a year earlier, USDA said today, May 12.

A record of 4.4 billion bushels will be used to make ethanol, up from 4.3 billion estimated last month, USDA said. Corn exports this year were forecast to rise to 1.95 billion bushels, more than the 1.9 billion estimated last month.

USDA raised its estimate today for US soy exports in the marketing year that ends Aug. 31 to 1.455 billion bushels from 1.445 billion forecast in April and 1.283 billion bushels shipped in the previous year. The amount that will be processed into animal feed and cooking oil was forecast at 1.735 billion bushels, up 5 million from a month earlier.