US soy futures fall as improved weather conditions aid seeding

Soy fell for the first time in four sessions on speculation that farmers in the US and China, the biggest consumers, will accelerate planting, increasing yield potential.

Warm, dry weather will return to the US Midwest by May 15, firming soil to support seeding equipment after some areas get as much as 2 inches of rain in the next two days, according to reports. Similar conditions will prevail in China, where rain delayed fieldwork in the past month, the company said.

Soy futures for July delivery fell 0.5 cent to US$9.655 a bushel on the CBOT. The price rose 1.3% in the previous three sessions. The most-active contract has dropped 7.9% this year as rains boosted crops in South America.

Prices also fell on speculation that record production this year in Brazil and Argentina will boost global inventories to levels that are adequate to meet increased demand for animal feed and cooking oil, analysts said.

US soy inventories will jump 92% to a four-year high before the 2011 harvest as farmers collect a record crop this year, the government said earlier.

Analysts believe that the market is adjusting to rising global supplies, adding that demand for US soy is going to slow as importers shift to supplies from South America.

The soy crop in the US was valued at US$31.8 billion last year, second only to corn, government figures show.