June 26, 2009

Soy prices maintained their upward momentum Friday, following a strong showing for Chicago Board of Trade futures Thursday despite general weakness in other grains - and are poised to rise further still in coming sessions as the market continues to focus on the current tight old-crop situation in the U.S., market observers said.

 

At 0700 GMT, e-CBOT's July contract was up 13.20 U.S. cents at US$12.09 a bushel. Farmers are holding back the leftover2008 inventories in a bid at propelling the market higher, while generally robust export demand for soymeal is also helping to underpin prices, traders said.

 

In China, however, soy prices in major producing areas were steady in the week to Friday as traders stayed on the sidelines amid expectations of government policy changes that they hope will support prices.

 

Beijing's removal earlier this week of export taxes on soy were largely cosmetic since China's actual exports are relatively small, but market participants said they hope more policies are in the works that could limit foreign competition.

 

China's June soy exports have been forecast to reach record levels, at 4.3 million metric tonnes, though participants said that news has now mostly been factored into prices.

 

In South Korea, the government's state trading arm has set up a pilot program to allow several industry groups to directly import a total of 30,000 tonnes of non-biotech, food-grade soy, according to a U.S. Department of Agriculture attache report posted Thursday on the Foreign Agricultural Services Web site.

 

The allotted volumes under this program are expected to grow depending on the outcome of this first year, it said.

 

Meanwhile, Taiwan's Breakfast Soy Procurement Association Thursday said it had bought 58,000 metric tonnes of soy from Bunge at US$3.43 a bushel over Chicago Board of Trade's November futures contract, with the shipments expected to arrive in Taiwan between Aug. 21 and Sept. 4.

                 

 

Australia Wheat Needs Rain

 

Pool returns on benchmark Australian Premium White grade wheat produced from a crop to be harvested late in 2009 are projected in a range of A$310 to A$320 a metric tonne, free on board, agribusiness AWB Ltd. (AWB.AU) reported Friday.

 

"Sowing of the Australian crop is complete in most regions of Australia with similar coverage to previous years, but good winter and spring rains are needed if yields are to meet potential," AWB's Australian Commodity Management unit spokesman Stuart Richardson said in a statement.