May 19, 2010
Soy cash premiums widen as US farmers halt sales; corn steady
Cash premiums for soy shipped to export terminals near New Orleans climbed relative to futures as a five-session slump in prices halted sales by farmers, while corn premiums remain unchanged.
The spot-basis bid, or premium, for soy delivered in May was 53 cents to 60 cents a bushel above July futures on the Chicago Board of Trade, up from 50 cents to 54 cents yesterday. The corn premium was 49 cents to 50 cents above July futures.
''There has been some increase in demand, and farmers are not selling any soy,'' said Ronnie Edge, a marketing manager at Owensboro Grain Co. in Owensboro, Kentucky. ''It's going to take a rally to get farmers to sell.''
Soy futures for July delivery fell 1.5 cents to US$9.395 a bushel. The five-session slump marked the longest slide in four months.
Corn futures for July delivery rose 3.75 cents, or 1.1%, to US$3.5975 a bushel, snapping a three-session slide.
Farmers are withholding supplies from the last harvest after cold, wet weather slowed planting and early crop development this year, Edge said.
''The crops are suffering from too much rain and they need some warm, sunny weather to improve,'' Edge said. ''Farmers are not going to sell until they know they have a good crop potential this year.''
Export sales of US soy rose 45% to 8.51 million tonnes from October 1 to May 6 from a year earlier, USDA data showed. Export demand for meal is improving, and domestic use is picking up after cattle and hog prices climbed, Edge said.
