CBOT soy up 1.5 percent on tight supply, short-covering
Chicago front-month soy futures were up 1.5 percent on Thursday (July 30), rising for a fourth straight day as tight US supplies more than offset a sell-off in commodity markets.
Corn extended gains on prospects of strong exports and slow farmer sales, while wheat rose on spillover strength from soy and corn.
Analysts said grain markets could have found a floor, with front-month soy trading 17 percent below its June peak and corn down 28 percent.
Genichiro Higaki, head of proprietary fund management team at Sumitomo Corp in Tokyo said tight supply is an underlying factor and same goes for corn and wheat. He said the index traders are long and the situation is oversold, hence, short-covering is natural while waiting for bullish news for corn exports.
Traders expect US net weekly corn sales to range between 850,000 and 1.2 million tonnes. The US Department of Agriculture will unveil its weekly export sales report at 1230 GMT on Thursday.
US farmers continued to delay sales awaiting release of the USDA's August supply and demand report. US soy supplies are projected to shrink to a 32-year low of 110 million bushels at the end of August, thanks to China's voracious appetite.
China, the world's No.1 soy buyer, revised upwards for the second time its estimate for the country's soy imports in July to 4.82 million tonnes, exceeding the previous month's actual imports at a record 4.71 million tonnes.
US soy for August delivery rose 15-A½ cents to US$10.73 per bushel by 0405 GMT, while the new-crop November contract was up 7-A¾ cents at US$9.23-A¾ a bushel.
September corn rose 1-A¼ cents to US$3.22 a bushel and September delivery wheat gained 2-A½ cents to US$5.14 a bushel.
Analysts said any measures to tighten regulation of speculators in the commodity markets could restrict fund inflows.
On the other hand, crude oil and grain futures markets soared to record highs last summer as huge flows of investment money came into the commodity markets just as the economy began unravelling. Americans want stronger federal control of financial markets, even if markets seem to have stabilized after last autumn's world financial meltdown, the head of the US futures regulatory agency said on Tuesday.
