Chicago Board of Trade soyabean futures closed higher on Friday due to a tight supply of US cash beans as tight-fisted farmers hold onto their newly harvested crop, hoping for higher prices, traders said.
Soyabeans got an added boost from a rally in soyaoil, primarily in the deferred months, on prospects for increased soyaoil demand after President George W. Bush signed a corporate tax bill that included a biodiesel tax incentive.
Soya futures settled 1/2 cent to 3-3/4 cents per bushel higher, with November up 2 at $5.30. The November/January spread continued to strengthen, reflecting a firm cash market and the fund roll of November short positions before first notice day on October 29.
"November is going to continue acting like this until they get out of their shorts," said one CBOT floor broker. Rising freight costs added to the difficulty in souring beans and moving them to US export markets and domestic crushing plants, traders said.Demand for soyabeans was underscored by the government's confirmation on Thursday that US exporters sold 204,000 tonnes of soyabeans to China in the previous day. However, a big US soya harvest limited the day's upward move.
Traders expected the US Department of Agriculture to report on Monday that 80 percent to 84 percent of the US soya crop would be harvested by Sunday, up from 71 percent last week.
On Friday was also the last trading day for November soyabean options, which went off the board quietly, traders said. Soyameal futures closed 70 cents to $2.10 per ton lower, setting back from this week's rising prices.
December settled $2.10 per ton weaker at $156.40 per ton. Commercials were net sellers of futures, but the US cash meal market held firm. Light farmer soya movement and difficulty souring transportation helped strengthen cash basis offers, dealers said.
Funds were net sellers of about 500 lots. The drop in meal prices came amid oil/meal spreading after soyaoil lost ground to soyameal this week. The soyaoil market closed higher, with the biggest jump in the deferred months on prospects for increased soyaoil demand after Bush signed a corporate tax bill that created tax credits of 50 cents to $1 per gallon for biodiesel.
Soyaoil futures closed 0.42 cent to 0.50 cent per lb. higher, with December up 0.45 at 20.85 cents. Commercials and funds were buyers of soyaoil. Malaysian palm oil futures closed lower overnight.
Volume was light to moderate. In soyabeans, an estimated 65,356 futures and 14,009 options traded. Estimated soyameal trade was 20,300 futures and 623 options. Soyaoil volume was pegged at 17,869 futures and 2,396 options.
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