China purchases, crop concerns up US soy

New-crop US soy futures rose half a percent on Wednesday (August 26), supported by China's purchases and concerns over the late developing crop.

 

Corn and wheat also firmed, tracking gains in soy, but the wheat market was under pressure from ballooning global supplies and weak demand for US wheat.

 

Although immediate weather forecasts point to favourable growing conditions, soy, which were sown late due to wet spring, are vulnerable to crop-damaging frost in September.

 

Soy futures ended mostly lower on Tuesday as a rally to 1-½ week highs gave way to profit-taking.

 

Last week, the US Department of Agriculture said China, the world's top soy buyer, made large purchases of US soy, taking 896,000 tonnes.

 

And private exporters reported the sale of 110,000 tonnes of US soy to China for delivery during the 2009/10 marketing year, USDA said.

 

Toby Hassall, an analyst with Commodity Warrants Australia said in the developing Midwest soy and corn, the weather is non-threatening. That said, Hassall, late development means crops are at more risk to any adverse late season weather events.

 

China is going to be a pretty active buyer on any breaks in soy price, and Hasall said they are still seeing strong demand for US beans.

 

Chicago Board of Trade soy for September delivery rose 0.6 percent to $10.97-¼ a bushel by 0357 GMT, while the new-crop November soy gained 0.5 percent to $10.04-¼ a bushel.

 

China's Dalian soy futures were little changed, with the most-active May contract up 0.13 percent at 3,726 yuan a tonne.

 

Analysts said weakening prices of oil, which often guides movement in corn and soy for their use in making alternative fuels, capped gains.

 

Oil extended losses below US$72 after sliding 3 percent from its highest since last October a day ago, hit by industry figures showing a hefty rise in US crude stocks and overshadowing upbeat economic data.

 

September corn rose 0.4 percent to US$3.22-3/4, while wheat was up 0.6 percent at US$4.73-¾ a bushel.

 

Wheat, which is trading around 8-month lows, has been weighed down by hopes of bumper output across the world.