US soy futures peaks on higher overseas demand

Soy rose the most in a month on speculation that demand is rising for U.S. supplies because farmers are holding back crops in Brazil and Argentina, the biggest exporters after the US.

US exporters sold 478,462 tonnes during the week ended May 13, double the average from the prior four weeks, the USDA said last week. Of the total, 60,000 tonnes were purchased by China, the world's biggest importer. The USDA announced on May 21 an additional sale of 120,000 tonnes for delivery to China after the start of the harvest on September 1.

Analysts said increasing demand for US soy has been a surprise after South America harvested record crops, also noting reports that some buyers are switching purchases to the US due to slow sales of newly harvested inventories by farmers in Argentina and Brazil.

Soy futures for July delivery rose 5.75 cents, or 0.6%, to US$9.4675 a bushel on the CBOT, heading for the biggest gain for the most-active futures since April 22. Soy fell 1.3% last week after losing 5.6% the prior three weeks. The price touched US$9.31 on May 20, the lowest level since March 31.

Sales of US soy from September 1 to May 13 have risen 14% to 38.119 million tonnes from 33.523 million tonnes during the year-earlier period, USDA data show.

Brazil and Argentina may harvest a combined 122 million tonnes this year, up 36% from a drought-reduced harvest of 89.8 million tonnes last year, the USDA said earlier this month.

US soy crop, the world's largest grower, was valued at US$31.8 billion last year, second only to corn at US$48.6 billion, government figures show.