US MIDDAY: soya drops

January 05, 2013


US soyabeans
US soyabeans

US soyabeans fell over 1 percent to a six-week low on Friday, the fourth consecutive daily drop, on prospects the US government may increase its forecast size of the US crop, a likely bumper harvest of South American soya and China’s cancellation of orders for US soyabeans.

“A lot of this has to do with the good outlook for the South American crop. Brazil’s crop weather has been good and now Argentina is improving. Argentina is catching up after a period of wet weather,” said Anne Frick, oilseeds analyst for Jefferies Bache. South America is the largest soyabean producing region in the world, followed by the United States. Frick also said soyabeans were still labouring under the weight of the US Department of Agriculture’s (USDA) announcement on Thursday that China, the world’s largest soya importer, had cancelled orders for 315,000 tonnes of US soyabeans.

The USDA gave no reason for the cancellations, which follow China’s scrapping of purchases totalling 840,000 tonnes in the week of December 16. Another 120,000 tonnes cancelled that week were believed by traders to have been by Chinese importers. USDA will release its final crop production report for the 2012 US soyabean and corn harvest on Friday, January 11. Analytical firm Infoma Economics on Friday estimated 2012 US soyabean production at 3.040 billion bushels, up from its previous outlook for 2.971 billion, and raised its estimate for corn output to 10.800 billion from its previous outlook for 10.725 billion.

Wheat and corn remained under pressure, trading near six-month lows amid a broad-based weakness in commodities and stronger dollar which makes US grains less competitive on exporting markets. At 10:46 am CST (1646 GMT), Chicago Board Of Trade March soyabeans were down 26-1/2 cents per bushel at $13.60, March wheat was down 9-3/4 at $7.45-3/4 and March corn eased 4-1/2 cents at $6.84-3/4.

Technical selling weighed on all three markets. But declines were slowed by their relative strength indexes, each of which had slipped into levels suggesting the markets are oversold. March corn was holding just above key technical support at its 200-day moving average of $6.84 per bushel, which also was the session low. New-crop December 2013 corn, which fell below $6 per bushel last week, is at its lowest level since early July.

Courtesy: Reuters

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More