US soy crushing down after Argentina settles dispute

Soy demand from US processors fell 6.7 percent last month after Argentina rescinded an export tax increase.

The controversial export tax, was rescinded after it was voted down in the Argentine senate, ending a four-month dispute between the government and farmers.

The supply of Argentine grains released has also reduced demand for US vegetable oils and animal feed.

According to  the National Oilseed Processors Association, processors such as Bunge Ltd. and Archer Daniels Midland. crushed 133 million bushels of soy last month, down from 142.5 million in July 2007

Argentina is the world's biggest exporter of soyoil and meal.

During the four-month dispute that saw farmers blockading roads to prevent supplies from being exported, demand for US soy increased.

Still, soy futures for November delivery rose the 70-cent limit allowed by the CBOT to close at US$12.84 a bushel yesterday, the biggest since January 2007. Most-active futures, which jumped 49 percent in the past year before today, reached a record US$16.3675 on July 3.

US processors will use 1.83 billion bushels of soy to make animal feed and cooking oil in the marketing year that ends Aug. 31, up from 1.808 billion last year, the USDA said Aug. 12. Use may fall to 1.815 billion bushels next year, the department said.

Advance export orders of soyoil since Oct. 1 are 85 percent above year-ago levels on increased demand from China, the world's biggest buyer, USDA data show. Since Oct. 1, shipments of soymeal are up 7.9 percent from the same period a year earlier, the USDA data showed on July 31.