January 3, 2008

World soy inventories to plummet by 23 percent in 2007 - 08 season

From a record of 61.1 million tonnes in 2006 - 07 marketing season, world soy inventories are projected to fall by 23 percent to 47.3 million tonnes, the USDA estimates.

Goldman Sachs Group Inc. said in a December 11, 2007 report that soy would reach US$14.50 a bushel due to tight edible oil supply in the international market. The investment firm also noted that soy has the greatest potential for further price increases due to a "very tight" edible oil supply in the global market.

Corn prices also rallied as China announced export tax on grains to curb its domestic price hikes. A 5-percent tax on exports of corn and soy and a 20-percent tax on wheat exports went into effect yesterday.

Corn for March delivery rose as much as US$6.5 cents, or 1.4 percent, to US$4.62 a bushel, the highest since June 1996, and traded in after-hours electronic trading on the Chicago Board of Trade at US$4.60.

Meanwhile, wheat for March delivery also gained US$20.75 cents to US$9.06 a bushel, and traded at US$8.97, marking a 2.3-percent increase.

Wheat futures surged 77 percent last year and reached a record of US$10.09 on December 17.