May 21, 2007

Soybeans in demand in Chicago

Chicago's futures for soybeans show a constant rise in the last few days reached a six-week high on improved demand for animal feed and vegetable oils. Corn futures were little changed, while wheat gained amid speculation about weather damage to the US crop.

Soybeans rose this week after the National Oilseed Processors reported and increased output by 6.1 percent in April from a year earlier. Demand for soybean oil may increase as the price of rival palm oil reached its highest in more than eight years after Indian data showed imports at a four-month high in April.

Government figures show soybeans are the second-biggest US crop, valued at US$19.7 billion in 2006, behind corn at a record US$33.8 billion in 2006.

Wheat, the fourth biggest crop behind hay, with a value of US$7.7 billion, gained 1.1 percent this week on speculation wet weather will promote disease in the US crop.

The Chicago wheat market was also supported after Canadian Pacific Railway Ltd. track maintenance workers went on strike. Canada is the world's second-largest wheat exporter after the US.

If the strike continues there will definitely be an impact on the market, trade specialists say.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.