May 15, 2008

 

US soy futures still on record levels as Argentina strike continues

 

 

US soy futures were unchanged on Wednesday after hitting an all-time high due to Argentina's resumption of strike.

 

Soy futures for July delivery closed at US$13.794 a bushel on the Chicago Board of Trade. Futures touched US$13.90 earlier, the highest since April 16.

 

George Spisak, a broker at Frontier Futures Inc., said that recent prices increases of soy were due to the continued problem in Argentina.

 

US soy prices remained strong amid projections of the USDA that soy production and year-end stocks will increase sharply in 2009.

 

On Friday, the USDA said that soy acreage is to surge nearly 20 percent in 2009, propelling next year's production by 520 million bushels to a total of 3.1 billion.

 

Year-end stocks were expected to increase 28 percent to 185 million bushels.

 

Spisak noted that although soy production in the US is seen rising, if major exporters are not exporting anything, world prices could still rise.

 

Meanwhile, rising prices of soy and other crops have been pushing consumer prices higher in the U.S.

 

Food prices rose at the sharpest rate in 18 years in April, the Labor Department reported Wednesday.

 

US consumer price index for fats and oils is expected to increase by 8 percent to 9 percent this year, up sharply from last year's 2.9 percent, Joseph Glauber, chief economist of the USDA, said.