Soyabean futures at the Chicago Board of Trade closed firm on Tuesday as fears about the spread soya rust inspired fund-short covering, pushing the market through technical resistance, traders said. CBOT soyabeans settled 6 to 8 cents per bushel higher. January closed 6-3/4 cents firmer at $5.61-1/4, reaching a high of $5.62. "We had a hard time getting through $5.60-1/2 we finally did late," said one soyabean pit trader.
"It doesn't seem to want to break." January soya is now well above the 20 and 50-day moving averages. The next key resistance level is at the 100-day moving average of $5.72-1/2 per bushel.
The government late on Monday confirmed the yield-cutting soya rust disease was in Arkansas, the sixth state where rust has been found. There was also talk circulating the floor about rust possibly found in Missouri.
The US Agriculture Department said there was no case of soya rust in Missouri. However, the government said late on Tuesday it was testing suspect fields in Tennessee. The big worry is that rust will spread into the heart of the Midwest next summer and cut 2005 soya output in the United States, the world's largest producer.
November 2005, the first contract month representing the new crop year, posted the biggest jump to end 8 cents higher at $5.92-3/4. Commodity funds were net buyers of about 2,000 lots.
There was limited commercial hedge pressure as the US harvest winds down. USDA reported on Monday that US soya harvest was 95 percent complete. CIF soya values at the US Gulf firmed, helping to fuel the market. But no fresh export sales were reported.
Soyabeans also found support from the strength in neighbouring soyameal pit, which closed $1.30 to $3.30 per ton higher. December was up $3.30 at $162.60. Much of the strength in meal stemmed from fund short covering and rolling of December positions before first notice day on November 30, traders said.
"It's really hard to tie any fundamentals to the strength in the front end," one floor broker said. But uncertainty about rust and mad cow disease keeps traders edgy and unwilling to build short positions.
If a second case of mad cow is confirmed in the United States, there was the possibility that soyameal usage as a protein source could increase if the government further restricts the use animal by-products in feed rations.
Soyaoil was the weakest of the complex, settling steady to 0.10 cent per lb lower. December closed 0.04 down at 21.67 cents. Rolling of December soyaoil positions before first notice day and net fund selling of roughly 2,500 oil contracts pressed prices. There was also some meal/oil spreading, which added to weakness in soyabean oil.
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