June 16, 2010
CBOT soy futures up on expectations for higher biofuel demand
US soy futures climbed on speculation that higher oil prices may boost demand for the crop as a source of biofuel.
Wheat futures, little changed, may also gain on concern that rains may reduce production in the US and Canada.
The most-active contract for the oilseed on the Chicago Board of Trade rose as much as 0.6%, while corn, used to make ethanol, matched yesterday's (Jun 15) one-month high. Oil gained to more than US$77 a barrel in New York after a report on US manufacturing boosted optimism that the recovery remains intact.
''It's not strange for corn and soy to get support from higher oil prices,'' said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. Still, the gain in the two crops may be limited as favourable weather has improved US crop conditions, he said.
Soy for November delivery gained as much as 5.25 cents to US$9.2075 a bushel, and last traded at US$9.2025. The price reached US$9.2625 yesterday, the highest level for a most-active contract since June 8.
Corn for December delivery climbed as much as one cent to US$3.76 a bushel, and traded at US$3.7575 at 1:52 p.m. Singapore time. Futures dropped 9.4% this year, in part on forecasts for higher US output.
Soy were partly supported by a jump in rapeseed prices in Canada, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a daily note. Canada is the largest exporter of rapeseed, followed by Ukraine, according to USDA data.
