July 22, 2010

Soy premiums decline relative to Chicago futures

Cash premiums for soy shipped to export terminals near New Orleans decreased relative to Chicago futures as buyers retreated after prices rose; corn premiums were unchanged.

The spot-basis bid, or premium, for soy delivered in July shrank to 88 cents to 94 cents a bushel above August futures from 88 cents to 95 cents Tuesday (Jul 20), USDA data show. The corn premium was unchanged at 35 cents above September futures. The spot premium for corn declined Tuesday to the lowest level since March 23.

With this year's soy harvest a month away in the US South, cash grain dealers are doing a delicate dance to make sure that they do not buy a lot of high-priced old crop, said Charles Sernatinger, a vice president for ABN Amro Clearing LLC in Chicago. "Export demand for corn is routine."

Corn futures for September delivery rose 5.75 cents, or 1.5%, to US$3.7975 a bushel in Chicago, the first increase this week. The contract is up 4.7% this month.

Government inspectors examined 6.851 million bushels of soy for export in the week ended July 15, down 51% from a year earlier, the USDA said this week in a report. Corn inspections fell 4.7%.