February 18, 2008

 

CBOT soy contracts hit records thanks to wheat demand and China's snowstorm 

 

 

CBOT's July soy contract soared to a record US$14.13-1/2 per bushel on anticipation of Chinese demand after its snowstorms and on spillover effects from the rising US spring wheat markets last week.

 

US spring wheat prices for some contracts are already nearing US$20 per bushel.

 

The gains were following a wave of record highs set in Asian trading hours for CBOT soy and soyoil.

 

CBOT soy closed 5 to 17 cents per bushel higher, with March issues up 5-3/4 at $13.73-3/4 per bushel. Although the surge was largely the result of US spring wheat prices hitting record highs, China's massive purchases, brought on after snow storms pummeled crops, also spurred further buying.

 

China's government revealed last week that the latest snow storm, believed to be the worst in 50 years, damaged 40 percent of the rapeseed crop.

 

Meanwhile, crop weather in South America was satisfactory for soy development and early soy harvesting. Brazil is expecting a "very good" soy crop, according to Agroconsult. Good weather conditions are also reported in Argentina.

 

The rise in CBOT also brought up soy futures in Argentina.

 

In the main grain port Rosario, soy closed higher at 1,040 pesos (US$329.9) per tonne, compared with the previous session's 1,032 pesos (US$327.36).

 

However, Argentine soy for delivery in May, which is quoted in US dollars, closed stable at US$315 per tonnne. 

 

While soyoil closed at contract highs across the board, boosted by Chinese demand, soymeal was down 60 cents per tonne, with March contracts at US$358.80 per tonne.