December 28, 2010

US soy advances at 28-month record high, corn gains

Soy ascended to a 28-month high and corn gained on speculations that dry weather in Argentina will spread to parts of Brazil, hurting crops in the world's major shippers of both commodities.

March-delivery soy gained as much as 0.8% to US$13.95 a bushel, the highest price for the most-active contract since August 2008. It traded at US$13.94 a bushel at 9:48 a.m. Manila time. Corn for March delivery climbed 0.3% to US$6.17 a bushel.

"Heat and dryness is expected to expand out of Argentina and into Rio Grande Do Sul this week," depleting soil moisture and increasing stress to crops in the area, forecasted Telvent DTN Inc.

"The market is worried about downgrades for yields. The market is getting tighter after the harvest in the US and people will rely on supply from South America," said Tetsu Emori, a commodity fund manager at Astmax Co. Ltd.

Soy acreage in Argentina may fall by 200,000 hectares (494,210 acres) to 18.5 million hectares this season, the Buenos Aires Cereals Exchange said December 23. Yields in Brazil's southern Rio Grande do Sul state may be cut by as much as 20% as the La Nina weather pattern produces hot, dry weather into next year, Somar Meteorologia said December 20.

Corn inspected for export at ports in the US, the world's largest shipper, rose 5.4% from a week earlier to 32.6 million bushels in the week ended December 23, the nation's Department of Agriculture said. That takes the total so far in the marketing year that began September 1 to 541.8 million bushels, up 4.3% from a year earlier.

Wheat for March delivery gained 0.7% to US$7.855 a bushel in Chicago.