Soya surges on commercial buying

Soyabean futures on the Chicago Board of Trade closed higher on Friday, rebounding after on Thursday's steep plunge on commercial buying and a bounce in US stock markets, traders said. Strength in soyaoil added support.
The benchmark November soyabean contract settled up 13-1/4 cents, or 1.6 percent, at $8.27-3/4 per bushel after closing 40 cents lower on Thursday, when futures at times fell the 50-cent limit. Spot September soyabeans ended up 12-1/4 cents at $8.11-1/2 per bushel and back months through July 2009 were up 4 to 13 cents.
Funds bought 4,000 to 5,000 contracts of soyabeans and 1,000 of soyaoil, traders said. Funds were even in soyameal. Commercials were a major presence in soyaoil, buying an estimated 3,000 to 4,000 contracts on the day. CBOT September soyaoil closed up 0.89 cent, or 2.6 percent, at 35.39 cents per lb., with back months up 0.30 to 1.04 cents.
September soyameal ended steady at $218.80 per ton and October was up $1.20 at $222. Volume in soyabeans was estimated by the CBOT at 105,065 futures and 44,509 options. Soyaoil volume was estimated at 55,556 futures and 6,233 options. Soyameal volume was estimated at 41,440 futures and 4,206 options. Soyabean futures had traded lower overnight, but market sentiment turned bullish on Friday after the US Federal Reserve cut its discount rate by 50 basis points.
The move was intended to restore order to financial markets, which have been hit hard by turmoil in the credit sector. After the Fed announcement, gold and crude oil futures climbed and US stocks rallied, setting the stage for a bounce in soyabeans and corn.
"I think the tone of everything changed when the Fed made the rate change. Everyone I knew, before that happened, was coming in and saying, 'Where do we sell a bounce?' And that sentiment dried up," said James Barnett, analyst with MF Global Research in Chicago.
Firm cash markets were supportive. Spot basis bids for soyabeans were higher in the US Midwest on Friday as grain dealers responded to Thursday's steep declines in futures.
US crop weather was mostly favourable, with rains in the next several days expected to boost pod setting and filling. However, some updated forecasts scaled back some of the expected moisture. Traders continued to monitor the progress of Hurricane Dean, which was moving across the Caribbean islands on Friday.
"It looks like Hurricane Dean is now going to veer over the Yucatan, so (there are) less prospects for moisture coming up into the Delta and the Ohio Valley," Barnett said.