October 18, 2010

US soy rises to 16-month high as China-led demand increases

US soy jumped to its highest price since June 2009 as reports showed rising demand from importers such as China for supplies from the US, the world's largest grower and exporter.

Shippers sold 518,803 tonnes to China and unknown buyers for delivery before August 31, the USDA said. Sales in the week ended October 7 rose 17% to 1.109 million tonnes from a week earlier, including 53% to China, the biggest consumer. Soy prices are up 34% since June.

"Chinese demand continues to grow," said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. "As long as the Chinese are buying, the market is not going to retreat very far," he said.

Soy futures for January delivery advanced US$0.068, or 0.6%, to US$12.058 a bushel on CBOT, after jumping earlier to US$12.145, the highest price for a most-active contract since June 5, 2009. The commodity surged 23% in the third quarter.

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