Soyabean futures at the Chicago Board of Trade rose on Tuesday on the back of the November 2008 contract as the struggle to secure bean acres for next year began this week, traders said.
As the day proceeds, corn built strength and soyabeans climbed further. May soyabeans ended 5-1/4 cents higher at $7.64-3/4 per bushel, with the deferred months up 4-1/4 to 8-1/2 cents.
CBOT November soyabeans 2008, which closed at $8.17 per bushel on Tuesday, rose 28 cents in the past two days outpacing the 11-1/4 cent rise in front-month may. "We officially started as of yesterday the acreage fight for next year," said Roy Huckabay, analyst with The Linn Group, a Chicago-trade house.
This year alone US farmers are expected to cut soyabean plantings by roughly 7 million to 9 million acres as the strong price of corn relative to soyabeans encouraged them to plant more corn. Another increase in corn acreage was likely for next year given outlooks for corn demand to explode given the booming ethanol industry.
"Fundamentally, our situation is going to be more acute for acreage in '08 not in '07. We've got plenty of bumper stocks to deal with for this year," the trader said.
But the volume in November 2008 was thin, making it more prone to exaggerated price swings, analysts said. The products were supported by the strength in the other CBOT markets.
May soyameal closed $1.70 per ton higher at $221.20, with the back months up 20 cents to $2.50. Soyabean oil ended 0.18 to 0.30 cent per lb higher, with May up 0.25 cent at 31.24 cents.
Commodity funds bought 3,000 soyabean contracts, 2,000 soyameal and 2,500 soyaoil. Volume was on the lighter side. Estimated soyabean trade was 74,235 futures and 16,842 options. Soyameal volume was pegged at 24,633 futures and 2,238 options. Soyaoil trade was estimated at 24,105 futures and 3,392 options.
An advancing South American soyabean harvest with exporters turning away from US supplies to cheaper Brazilian supplies were bearish inputs.
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