May 25, 2009

US soy futures headed for a fourth weekly gain on improved demand prospects for the US crop amid declining output in South America.

 

The oilseed is up 4.7 percent last week and touched US$11.895 on May 20, the highest since September 26.

 

US exporters reported sales of 700,634 tonnes in the week ended May 14, up 74 percent from the previous week, the Department of Agriculture (DA) said on Thursday (May 21).

 

Sales of soymeal in the four-week period through May 14 doubled from a year earlier.

 

Analyst at Tokyo-based commodity broker Central Shoji Co Toshimitsu Kawanabe said soy is targeting US$12 a bushel, adding that USDA data showed demand for the US crop increasing sharply even during the seasonal peak of South American oilseed exports.

 

Soy for July delivery added 0.8 percent to US$11.84 a bushel on the Chicago Board of Trade (CBOT) at midday in London. Futures have gained 21 percent this year.

 

USDA said on Thursday (May 21) that China bought 27 percent of total US soy exports the previous week, as the world's biggest buyer boosted purchases of US soybeans to 18.5 million tonnes since September 1, a 41 percent increase from a year earlier.

 

USDA said US inventories on August 31, before the harvest, will probably drop 37 percent to a five-year low of 130 million bushels.

 

The agency also said estimated global production this year will decline to 212.8 million tonnes because of smaller crops in drought-hit South America.

 

Forecasts a month ago was 218.8 million tonnes. Last year, output was a record 221.1 million tonnes.

 

Corn for July delivery advanced 1.2 percent to US$4.2925 a bushel. The price reached US$4.3475 on May 20, the highest since October 9, on speculation planting delays would reduce acreage and yields in the US.

 

July-delivery wheat added 1 percent to US$5.995 a bushel. The contract reached a high of US$6.0475 on May 20, the highest since January 26, but futures have fallen 1.8 percent this year.

 

Milling wheat for November delivery fell 50-cents, or 0.3 percent, to US$218 a tonne on the Euronext exchange in Paris.