October 1, 2008

Larger inventories cause further drop in US soy futures

Soy futures for November delivery fell 49 cents, or 4.5 percent, to US$10.45 a bushel on CBOT as the USDA revealed larger than expected stocks. 

The slide meant soy futures had suffered the biggest quarterly decline in 35 years, falling 34 percent in the quarter. Soy was at a record US$16.36 in July.

In the month, the oilseed dropped 21 percent, the most since March.

The drop follows a similar trend in corn prices, which fell to its lowest levels in eight months.

soy supplies on Sept. 1 were 205 million bushels, up 46 percent from 140 million projected by the agency on Sept. 12.

Last year's crop was 2.676 billion bushels, up 3.5 percent from an earlier estimate, the USDA said.

The larger crop last year meant that even with a smaller soy crop this year, there would be enough supplies, analysts said.

US farmers will harvest 2.934 billion bushels this year, up 9.6 percent from last year's revised crop, the USDA said on Sept. 12.

At the same time, soy usage in the quarter that ended Aug. 31 fell 9.2 percent to 471 million from a year earlier.