US soy futures hit two-month low amid economic recovery concerns

US soy futures fell almost two percent on Thursday (July 9), sliding for a fifth straight session to their lowest level in more than two months, on long liquidation by funds amid concerns about the pace of economic recovery.

 

 

Leaders said the world economy still faced significant risks and it was too early to unwind stimulus measures until an economic turnaround is secure, prompting investors to trim riskier bets.

 

MF Global Australia trader Brett Cooper said that it is liquidation that is seen in old-crop soy for the last few session, adding that the market has been long on old-crop and short new-crop, that is the play.

 

Chicago Board of Trade July soy futures fell 1.9 percent, or 20-A¼ cents to US$10.63-A¾ a bushel, taking losses this week to almost 15 percent.

 

But deferred months, including November soy, gained between 0.8 to 1.7 percent.

 

Fears of tight US supplies and strong exports to China had fuelled a sharp rally in soybean futures the past few months. But long liquidation by commodity funds ahead of contract expiration on July 14 kept the pressure on the spot month.

 

Concerns that the US Commodities Futures Trading Commission may consider adopting some position limits for index funds to cut down on market speculation also remained a pressure point.

 

Chicago July corn contract rose 0.6 percent to US$3.41-A¼ a bushel and wheat climbed 1.2 percent US$4.94-A¼ a bushel.

 

Traders said that while there was a lack of action in the corn market, wheat rose on hopes of better demand for US wheat after latest purchases by Egypt.

 

Egypt's main government wheat buyer said on Wednesday (July 8) it had bought 175,000 tonnes of US soft red winter wheat and French wheat for shipment August 1-10.