Soybean futures at the Chicago Board of Trade closed higher Monday on follow-through technical buying after notching a 34-year top overnight, traders said. But trade was quiet during the shortened session for Christmas Eve. Chicago Board of Trade markets reopen for electronic trade on Wednesday at 6 am after being closed Tuesday for Christmas Day.
Long-term fundamentals are bullish for soybeans which entices more speculative capital to move into the market. The market is jittery about securing enough US soybean acres next spring after a short crop in 2007 as it competes with corn. The current November 2008 soy to December 2008 corn price ratio favours corn plantings over soybeans, analysts said.
"Corn and soybeans are still in the acreage race. If one goes up the other follows," said Vic Lespinasse, analyst with Illinois Grain in Chicago. Equally important is the need for South America to have perfect growing weather this season to ensure a big crop. Argentina has been dry this season, which slowed planting, but the country was benefiting from recent rains.
Over the weekend Argentine corn and soybean regions saw rains of 0.25 to 1.0 inch, with 60 percent coverage. More showers were expected Wednesday into Friday, said a DTN Meteorlogix forecaster.
Also supportive was the world's top soy buyer, China, extending its reduction on import duty for soybeans - a cut to 1 percent from 3 percent - to the end of March to help curb inflation. January soybeans closed 3-1/2 cents higher at $11.81 per bushel after soaring overnight to $11.84 which marked a 34-year high for a spot contract.
The back months ended 3 to 8 cents firmer, notching contract highs across the board. The products also ended firm, underpinned by strong technicals. Good global demand for feed remains supportive to soymeal and a late upturn in crude oil pushed soyoil higher.
January soymeal ended $1 higher at $329.20 per ton; deferreds were steady to up $3.50 with several making new highs. January soyoil closed 0.31 cent firmer at 47.46 cents per lb. The backs settled 0.20 to 0.53 cent higher after most made fresh highs.
Commodity funds net bought about 1,000 contracts in each soybeans, soymeal and soyoil contracts, traders said. Midwest basis bids for soybeans were mixed Monday, with sales quiet ahead of the holiday, dealers said. USDA's weekly grain export inspections report will be issued on Wednesday.
Malaysian palm oil futures closed higher. Friday's trade data from the Commodity Futures Trading Commission showed that large speculators cut their longs in soybeans, soymeal and soyoil during the week ended December 18.
In soybeans, large speculators were net long 126,000 contracts, down 12,000. For soyoil, large speculators reduced their net long position by 1,200 contracts to roughly 44,000 lots. For soymeal futures/options, large speculator trimmed their net long position to 76,000 contracts, down 3,500.
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