November 19, 2010

CBOT soy declines on speculation that rains may aid argentine sowing

CBOT soy declined, reversing earlier gains, on speculation that rains in Argentina may help farmers advance planting in world's third-largest shipper and on concern that tightening measures in China may curb commodity demand.

January-delivery soy lost as much as 0.9% to US$12.305 a bushel on CBOT, reversing a 0.5% gain, and traded at US$12.33. The contract is set for a 2.8% decline this week.

Northern Argentina may get rains through the weekend, analysts said. That may help farmers speed planting that had been curbed by lower soil moisture because of a shortage of rain, analysts said.

Planting in Argentina will drop to 18.7 million hectares (46.2 million acres) in the current season, from 19 million in the previous period, when farmers harvested a record 55 million tonnes, the Buenos Aires Cereals Exchange said.

Rain forecast in Argentina is potentially a bearish influence, an analyst said. "The dryness has supported market mentality at times," he said.

Corn for March delivery fell 0.9% to US$5.505 a bushel in CBOT, reversing a 0.7% gain. The contract is set for a 0.5% gain this week.

The March-delivery wheat contract slipped 0.4% to US$6.82 a bushel in CBOT, erasing a 1.2% advance. The contract is headed for a 3.8% loss this week.

Commodities and Asian stocks declined on speculation that China will raise interest rates to curb inflation, prompting investors to seek safer assets, including the dollar.