June 4, 2010
CBOT soy futures rise on firm cash markets
US soy futures rose 2.4% on Thursday (Jun 3), their biggest one-day percentage climb since late December, on tightening cash soy and soymeal values as farmers held their supplies off the market.
Corn futures settled modestly higher, lifted by soy, but near-perfect US growing weather capped the rally, reinforcing expectations for a bumper crop. Wheat slumped to an eight-month low amid an absence of bullish news.
At the Chicago Board of Trade, soy for July delivery settled up 22-1/2 cents at US$9.55 per bushel. The July soy contract gained sharply against later months on spreads, reflecting intensifying nearby demand for soy among domestic processors and other handlers.
US farmers have sold most of their 2009 soy harvest and have been awaiting higher prices to unload the rest. Meanwhile, despite a record-large South American soy harvest, farmers in Argentina and Brazil have also been tight holders.
As a result, cash values for soy and soymeal, used in animal feed, have marched higher in recent weeks.
Grain merchandisers near Decatur, Illinois, home of soy processing giant Archer Daniels Midland Co, were bidding for soy Thursday at 18 cents over the price of CBOT July futures, up from one cent under, one month ago.
At the US Gulf, exporters were bidding at 68 cents over soy futures, nearly triple the month-ago bid of 25 cents over.
"Users are stretching for the soy," said Bill Nelson, an analyst with Doane Advisory Services in St. Louis.
"Farmers are busy planting and are needing some incentive to shake loose those last stocks. I think it's a battle going on where the holders are winning right now."
The CBOT July/November soy spread was on the boil, with the premium for July over November peaking at 37-1/4 cents, a two-month top, up from 29 cents at Wednesday's (Jun 2) close.
