Chicago Board of Trade soyabean ended sharply higher on Friday on short-covering after on Thursday's near-limit losses and on expectations the USDA would cut its South American Soya crop estimate next on Friday, traders said.
Firmer US and South American Soya basis values and talk that top global Soya importer China bought two cargoes of Soya from Argentina also underpinned CBOT Soya, they added. "And people are worried about coming in short on Monday, after we traded limit-up this on Tuesday," a trader said.
CBOT soyabean ended up 3 cents to 32-1/2 cents per bushel, with July up 32-1/2 cents at $8.38-1/2 and November up 10-1/2 cents at $6.98, 36-1/2 cents below this week's top.
Commodity funds bought at least 3,000 contracts and commercials traded both sides about evenly, brokers said. The US Department of Agriculture is scheduled to release next on Friday its monthly domestic and world crop supply and demand data.
Last month, the USDA projected a 2003/04 Brazilian soyabean crop of 56 million tonnes, but Brazilian soyabean analysts have estimated the crop closer to 50 million tonnes. The USDA last put Argentina's 2003/04-soyabean crop at 35 million tonnes, a couple of tonnes above trade estimate.
Both Brazil and Argentina, the second and third largest global soyabean producers, respectively, suffered Soya yields losses this year due to drought and diseases. Their supplies are sorely needed as US soyabean stocks are expected to fall to a 27-year low by September 1.
Hopes of renewed demand for Soya from China also underpinned nearby CBOT soyabean contracts on Friday, CBOT brokers said. Chinese soyabean crushers, who experienced negative crush margins through much of the winter and spring, were scheduled to hold their third crisis meeting in Beijing on Monday in hopes of supporting domestic meal prices, CBOT traders noted.
Still, a mixed overnight close in Dalliance Soya futures reminded traders that China was still renegotiating prices on their purchases of about 1.5 million tonnes of South American soyabean. They also noted that the Chinese government might raise interest rates this month in hopes of slowing the country's economic growth.
Forecasts for warmer and drier weather next week in the US Midwest spurred expectations of a completion in 2004 seedlings, a factor that limited gains. But CBOT Soya bulls talked about a high-pressure system moving in, turning the Midwest hot.
Mild support also stemmed from USA's export sales report showing US Soya sales last week at 74,900 tonnes (old-crop and new-crop combined), versus estimates for nil to 50,000 tonnes.
CBOT soyameal ended up $4.00 to $9.20 per ton, with July up $9.20 at $263.70 and December up $2.90 at $220.20 per ton. Commodity funds bought about 1,500 contracts and commercials bought about 2,500 lots, brokers said.
Support again stemmed from this week's news that Canada planned to ban protein made from ruminants like cattle in pig and chicken feed to help prevent cases of mad cow disease.
Canada's chief veterinarian said this week he hoped the new rules will be in place soon, and CBOT traders noted American and Canadian feed rules will need to be synchronised to permit cross-border trade of foodstuffs and, eventually, live cattle.
Cash US Midwest soyameal basis offers were steady to weak on Friday, dealers said. Soyaoil futures ended up 0.51 cent to down 0.17 cent per lb., with July up 0.51 cent at 28.41 cents.
Commodity funds and commercials each bought at least 1,000 contracts, brokers said. The CBOT July soyabean crush margin closed down 6.65 cents at 54.15 cents per bushel.
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