Soy price could fall on fund sales

Soy prices could fall in the coming weeks despite high US exports if investment funds take profits after recent price rises, Hamburg-based oilseeds analysts Oil World forecast on Tuesday (December 1).

The analyst says "futures prices of soy are vulnerable to a setback in the near term." After the pronounced strength during the past three to four weeks, Oil World believes soy prices may decline if funds liquidate some of their long positions and lock in profits.

US soy futures touched a three-month high on Monday partly because of weak dollar and good US export prospects following poor South American soy crops.

Oil World noted that "US soy exports will establish a new record high in November and reach at least 7.4 million tonnes -- probably close to 8 million tonnes -- up steeply from 4.7 million tonnes in November 2008."

As Argentine and Brazilian soy stocks are sharply down on the year, global importers are increasingly dependent on US soy and products, in turn supporting US prices, it said.

But fund selling could still override the bullish US export factors, it said.

More rain in key soy producer Argentina had also improved prospects for the South American country's soy harvest in early 2010, it said.

Concern about Argentina's 2010 crop had been price supportive recently although Oil World warned it was still uncertain whether Argentine farmers will be able to plant all the soy they planned to sow.