June 23, 2008

Brazil soy premiums are rising as European and Chinese buyers hunt the globe for limited soy supply, brokers and traders said.

With a record-breaking soy crop harvested in May, Brazil still has abundant soy and is one on the narrowing list of countries where importing countries can get soy.

Argentina's soy exports have been curtailed by strikes while US exports would be limited and its new crop would be delayed due to late planting, said a trader at a large US soy exporter in Sao Paulo.

Soy premiums for immediate delivery rose 25 points to 25 cents over the July soy contract on the CBot, according to Soma Corretora, an export brokerage.

September soy premiums are 45 cents above the November soy CBOT contract and November has buyers offering at least 55 cents over the November CBOT soy contract.

Competition is fierce between Europe and China and Europe is willing to pay more, traders said.

Still, volumes leaving ports currently are small, brokers added.

Usually at this time of year, when Brazil soy stocks are still high because of the harvest, soy prices in Brazil are below CBOT prices. However,  Argentina's market closure meant demand has shifted to Brazil.