The Chicago Board of Trade soyabean market climbed more than 10 cents per bushel on Friday on follow-through short covering by funds, traders said.
Commodity funds exited or rolled their March short positions before the start of the futures delivery period on February 28 and mostly firm cash markets helped lift prices. The market was also feeding on itself by Friday's session, after it moved above its 20-day moving average on Thursday and approached its 50-day average of $5.29 in March on Friday.
"They're (funds) pretty heavily net short sometimes you get these things and you don't have to have a piece of news to trigger an event, it just has to be a lack of momentum in the current direction," said Anne Frick, an oilseed analyst with Prudential Securities.
March closed 9-3/4 cents higher at $5.25-3/4 per bushel, after climbing 12-1/2 cents to $5.28-1/2 - its biggest jump in more than two weeks. However, the March/May spread weakened, with the May contract climbing 11-1/4 cents to $5.26-1/2.
A rally in the products, especially soyaoil, added to the spike in soyabeans.
Soyaoil futures climbed above 20 cents for the first time in nearly a month. March closed up 0.82 at 20.01 cents per lb., with the deferreds 0.43 to 0.83 cent higher.
"There was massive short covering in oil," said one floor broker, estimating they bought 7,000 to 10,000 soyaoil contracts.
Funds also covered shorts in the soyameal, buying about 4,000 to 5,000 lots. March soyameal closed $1.90 per ton higher at $157.10, with the back months $1 to $2 higher.
Spread trade remained active in all three markets. Refco spread 1,000 March/November soyabeans and R.J. O'Brien spread 900 March/May.
Weather in South America overall was conducive to good soyabean yields, although there were some dry pockets - in particular, Rio Grande do Sul, Brazil - that were cutting into yields.
It was mostly dry, with just a few light showers, in Rio Grande do Sul on Thursday. Similar conditions were forecast for Friday. The forecast for Saturday through Wednesday called for dry weather.
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