June 29, 2010

US corn premiums rise as farmers halt sales; soy weakens

Cash premiums for corn shipped to export terminals near New Orleans rose relative to Chicago futures as low prices discouraged sales by US farmers; while soy premiums narrowed on signs of slowing exports.

The spot-basis bid, or premium, for corn delivered in July was 45 cents to 50 cents a bushel above July futures, compared with 44 cents to 47 cents on June 25, USDA data show. July futures dropped 2% earlier, touching the lowest price since the contract began trading in February 2007.

The premium for soy delivered next month to loading facilities at the mouth of the Mississippi River fell to 57 cents to 65 cents a bushel above July futures from 60 cents to 66 cents on June 25. Soy inspected for export in the week ended June 24 fell 44% to 4.556 million bushels, compared with 8.15 million a week earlier, the USDA said.

Meanwhile, corn futures for July delivery fell 6.75 cents to US$3.3375 on the CBOT, after touching US$3.32. The contract has slipped 23% this year as rapid planting and favourable weather boost yield prospects.

Soy futures for July delivery fell 2 cents, or 0.2%, to US$9.55 in Chicago. The contract has fallen 9.8% this year on forecasts that combined output in Brazil and Argentina will surge 37% to a record, reducing demand for US supplies.