US soy futures rise as price drop halts farmer sales, tightens supply

Soy futures rose the most in six weeks on speculation that this month's slump in prices discouraged US farmers from selling inventories left over from last year's harvest.

Earlier, soy on the CBOT dropped 6.1% this month, heading for the biggest slide since January. Commercial-grain companies reduced the amount of soybeans deliverable against the Chicago futures by 34% to 2.76 million bushels, or 552 contracts, exchange data show.

Soy futures for July delivery rose 13.75 cents, or 1.5%, to US$9.5175 a bushel on the CBOT, the biggest gain since April 15. On May 25, soy touched US$9.275, the lowest level for a most-active contract since March 15.

Prices also rose as equities and the euro rallied after China affirmed its commitment to investing in Europe. Oil climbed as much as 4.4% after China denied as "groundless" a report that it is reviewing its euro-denominated investments.

Analysts said the rally in stocks and signs of some stability in Europe helped to bring some speculative buying back into the markets.

The soy crop in the US, 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.