May 20, 2009

Soy prices may rise in the near term on persistent Chinese demand and delays in U.S. planting.

 

According to data released by the U.S. Department of Agriculture Monday, U.S. soy exports last week reached 15.6 million bushels, with China buying 6 million bushels.

 

"There has been talk of China slowing imports near term, but this (last week's data) suggests differently," said Tim Hannagan, a U.S.-based grains analyst.

 

Hannagan added wet weather forecast in the near term was also affecting soy planting progress in the U.S., which could add bullishness to prices.

 

He pegged the near-term resistance for Chicago Board of Trade's July soy contract at US$12/bushel, with the next level at US$12.22/bushel.

 

At 0558 GMT, the CBOT July soy contract was trading at US$11.72/bushel, up 10.2 cents from the overnight pit-trade close.

 

In deals this week, Japan's Ministry of Agriculture is seeking a total 107,000 metric tonnes of U.S., Canadian and Australian wheat in a tender to be concluded Thursday.

 

In other wheat news, Pakistan's federal Economic Coordination Committee of the Cabinet has rejected a proposal to allow wheat exports, according to a Dawn newspaper report.

 

The daily said the panel rejected the Ministry of Food's request to export 500,000-700,000 tonnes, though the country is expected to have a surplus of 2 million tonnes wheat in this calendar year.

 

The panel was of the view allowing wheat exports now may create a domestic scarcity later in the year if the actual wheat production turns out to be less than estimated.

 

In 2007, Pakistan initially exported wheat but later had to scramble for supply, importing wheat at higher prices, as domestic demand overwhelmed supply.

 

Pakistan's wheat crop harvest for the year is almost over.

 

However, the panel has allowed the export of wheat products to neighboring Afghanistan.