September 22, 2010

US soy futures fall from 15-month high on crop outlook

Soy fell from a 15-month high on speculation that rains will allow farmers in South America to sow crops in areas where planting was delayed by dry weather.

The storms will move in September 26, improving soil moisture in fields from northern Argentina to north-eastern Brazil, an area that's been mostly dry since August 1, according to reports. As much as 2 inches may fall in early October, the forecaster said. Brazil and Argentina are the biggest soy producers and exporters after the US.

Soy futures for November delivery fell 4.5 cents, or 0.4%, to close at US$10.80 a bushel at 1:15 p.m. on the CBOT. Yesterday, the oilseed touched US$10.995, the highest level since June 2009. The price has gained 20% since the end of June.

Prices rose as much as 0.9% earlier on signs of increased demand for US soy from China, the biggest consumer and buyer of the oilseed.

US shippers sold 170,000 tonnes to the Asian nation for delivery before August 31, the USDA said earlier, reporting sales of 225,000 tonnes. The dollar has dropped this month against a basket of major currencies, reducing the costs of US supplies for overseas buyers.

The soy crop in the US was valued at US$31.8 billion last year, second only to corn at US$48.6 billion, government figures show.