US soy futures up slightly on bullish economy amid tight supplies

US soy futures rose nearly 1 percent on Monday (July 20), buoyed by a rally in Asian stocks and a softer dollar on a bullish outlook for the global economy, amid tight US old-crop supplies.

 

But trading was thin as the market awaited China's soy stock sale on Tuesday, which dragged down the market to a 3-1/2-month low last week when the country announced plans to sell 500,000 tonnes from its reserves.

 

The US dollar fell on Monday as concerns about the US economy abated and broadly improved corporate earnings lifted risk appetite and stock markets. Asia shares outside Japan rose more than 2 percent, scaling 2009 highs.

 

The old-crop Chicago Board of Trade August soy contract rose 10-A¼ cents, or 1.02 percent to US$10.19-A¾ a bushel, after gaining 33-A½ cents on Friday (July 17) when the market was recovering from a the sell-off.

 

 

Tight supplies and a steady drumbeat of mostly Chinese demand kept August soy futures on the hop. The contract goes into delivery at the end of July and expires on August 14.

 

China, the world's top soy importer, will put 500,000 tonnes of soy up for sale on Tuesday, the first such release from government's stocks this year.

 

Many analysts believe the planned sale was not expected to yield results given the higher price, but it could open doors to additional quantities being dumped into the market after a massive state stockpiling campaign that yielded a record 6 million tonnes.

 

China's Dalian soy futures, Asia's most active, rose more that 1 percent broadly in line with Chicago prices.

 

The CBOT September wheat contract rose 4 cents to US$5.45-A¾ a bushel on spillover strength from soy. The September corn contract was up A¼ cent at US$3.22-A½ a bushel.