July 29, 2013
US soysees biggest weekly drop in four years
US soy futureshave declined1.5% on July 19 and are boundfor the biggest weekly drop in nearly four years, due to poor demand for earlier crop supplies and buyers'' preference to wait on a bumper harvest.
December''s freshcorn cropssees little change after four straight sessions ofdropswhich werecaused byfavourable weather conditions.
End-users are beginning toturn away from purchasingcostly soy crops of earlier dates,given the prospects for a record-sized crop and cheaper prices in the future. Arising number offarmers selling their remaining oldersupplies of soyhas alsoplunged prices.
Spot basis bids for corn and soy plummeted across the US Midwest on July 25 in a wave of declines typically seen during the autumn harvest. The losses in soy futures, which fell to their lowest level in more than a year, have been triggered by a selloff in soymeal which fell by its daily trading limit forthe second consecutive day on the same day.
Chicago Board of Trade August soy slid 1.5% to US$13.35-1/4 a bushel, the lowest since June 2012 while the front-month soymeal contract slid 4.5% to US$427.8/tonne.
For the week, soy has lost more than 10%, the biggest decline since September 2009, while soymeal is down 11%, the most in nearly four years. Soy prices have fallen nearly 16% over the past three weeks.
Futures prices fornewcorn suppliesremained under pressure from forecasts of crop-friendly weather across the US grain belt. According to an agricultural meteorologist, below-average temperatures and occasional showers through the end of July will aid the pollinating US corn crop and boost growth of the soy crop.
New corn forDecember rose 0.1% to US$4.79-1/4 a bushel after falling for four consecutive sessions. Soy futuresfor Novemberlost 0.6% to US$12.17/bushel. CBOT sources said that over the past three days, commodity funds sold an estimated 31,000 contracts, or 155 million bushels of soy valued ataround US$2.356 billion based on July 22''s closing price of US$15.20-1/4 for August.
Tight stocks of soy and soymeal, due to a drought last season, had led to hugepurchases of each commodity. The developement hascausedahuge build-up of long positions in futures market.