June 10, 2010

Low demand drags US soy futures down

July Soy futures ended lower due to poor export demand of soymeal in the month of May.

The USDA announced the sale of 240,000 tonnes of soy to China for delivery during the 2010/11 crop year on June 09, 2010. Speculation continues that China will reduce its soy purchases over the next several weeks from Argentina.

As per Brazilian Vegetable Oils Industry Association, soy production forecast for 2009-10 increased to 68.4 million tonnes from 67.9 million tonnes in the last month. The 2008-09 crops produced 57.3 million tonnes.

Soy seeds stocks in the NCDEX accredited warehouses stood at 3,481 tonnes as of June 7, 2010.

Soy prices are expected to open slightly higher on firm overseas market; however, prices may come down in second half of the session on account of poor export figures of domestic soymeal in the month of May. But in the long term perspective, soy prices are expected to trade lower on higher global soy production estimate this year as compared with the previous year. There is also current decline in domestic oil meal export as against last year.