Chicago Board of Trade soybean futures closed higher on Tuesday, trying to recover from technically oversold conditions, traders said. May soy closed 7-1/4 cents per bushel higher at $5.62-1/2. The deferreds were up 5 to 9 cents.
"There was a lot of unwinding of spreads today ... soybeans/corn, wheat/corn. Everyone has been long corn," said one CBOT floor broker.
Soybeans gained on corn as the soy/corn spread adjusted some after more than a week of corn rallying and soybeans weakening.
The soy market has been under pressure, falling to four-month lows due to a bearish fundamental outlook. Part of it was USDA's outlook for US farmers to plant their largest soy crop in history while corn acres were seen as the smallest since 2001.
"There's more and more talk that corn acres won't be down that much and soybeans will be up but nowhere near the government's estimate," the broker added.
US soy plantings were estimated to be 76.895 million acres, up 4.8 million from 2005.
Since the eve of USDA's March 31 plantings report, new-crop December corn has gained nearly 34 cents on new-crop November soybeans, even after Tuesday correction. November soy closed at $5.95-1/2, up 8-3/4, and December corn ended at $2.73-3/4, up 1 cent.
Commodity funds bought about 7,000 soy contracts. J.P. Morgan bought 2,000 November and USA Trading bought 1,000 May. There were some supportive moves stemming from the options pit, with firms buying July $6 calls and June $5.80 calls. Firms were also rolling their May positions before the start of the delivery period at months end. In soybeans, Iowa Grain spread 3,200 July/May, Fimat USA spread 1,500 July/May and J.P. Morgan did 1,600 May/July.
Also supportive was a soaring gold market as traders expected CBOT markets to follow the metals higher. Commodity markets tend to move together due to the increased flow of speculative money by managed funds into commodities.
In exports, a leader of the Chinese trade delegation that signed agreements to buy 6.8 million tonnes of US soybeans said on Monday that China's appetite for the oilseed was still growing.
The US soy export pace was lagging this year as more competition from South America has weighed on soybeans this season. Competition should mount as Brazil and Argentina are in the midst of their soybean harvests.
Recent rains across the Midwest recharged soil moisture in the US crop belt. Clear, warm weather this week across most of the Midwest should prompt corn plantings, traders said.
Midwest spot basis bids for soy were steady to firm early Tuesday, with farmer selling quiet, dealers said.
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