November 27, 2008
US soy prices increase as China cuts rates
US soy increased slightly on Wednesday (Nov 26) as China, the world's largest buyer of soy, cut interest rates and the EU rolled out a big economic stimulus package.
Both moves were done to improve the global economy which, in theory, would improve the demand for grains and soy as food as well as feedstock for biofuels.
The EU asked members to provide a EUR200 billion (US$260 billion) economic boost and China announced its biggest interest rate cut in 11 years. The moves follow an US$800 billion credit market bailout from the US Federal Reserve.
US soy for January delivery was up 3 cents per bushel at US$8.86, December corn was up 1/2 cent at US$3.54 and December wheat was up 1-1/2 at US$5.35-1/2 per bushel.
In addition, gains in crude oil and an increase in the global stocks benchmark, the Dow Jones industrial stock index also supported prices, besides the harsh weather in several key global crop producing areas.
The corn market was holding firm but struggled against a lack of export demand since the world has plenty of feed grains including corn, feed wheat and barley supplies.