July 10, 2008

 

US soy recovers in Asian trade as oil prices steady

 
 

US soy prices rose to US$15.78 a bushel in the Asian trade as prices of crude oil steadied, with traders focusing on low US soy stocks.

 

The softening of the US dollar and a slight firming of oil prices underpinned soy, an Australian broker said.

 

US crude futures rose slightly to around US$138 a barrel on Wednesday (July 9), after a near US$10 fall earlier this week from Friday's record high, giving a calmer tone to Wednesday's grains markets.

 

Oil's recent surge to record highs has pushed grain prices higher.

 

Yet better US crop weather and a global sell-off of commodities, including crude oil, sent soy and corn futures down on Tuesday (July 8).

 

July corn weakened by 1.1 percent to US$6.85-1/4 a bushel, extending a 3-percent decline the day before on easing weather concerns and falling commodities prices.

 

Corn has come off a record high of US$7.65 a bushel less than two weeks ago due to flooding in the US
Midwest.

 

There was also some follow-through disappointment with the recent report of improving crop conditions, while spread trading between corn, wheat and soy also pressured corn futures, a broker said.

 

July wheat was nearly stable, up 0-3/4 cent at US$8.24 a bushel, but later contracts were firm with December rising 0.6 percent at US$8.64-3/4.

 

Grains found support partly in a return of international buyers taking advantage of the recent fall in prices to speed their covering, French analyst Agritel said, pointing to Egypt's tender for 55,000 to 60,000 tonnes of optional-origin wheat.

 

Crops are looking pretty good, including from Australia, certainly relative to the last two seasons. That should put prices under some pressure, said John Reeve, associate director of agricultural commodities, UBS Singapore.

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