Soyabean futures at the Chicago Board of Trade closed firm on Wednesday, hitting an 11-week high as ongoing weather and crop jitters sparked commodity index funds to buy beans, traders said. The move in soyabeans coincided with speculative buying in other US commodities, including the US crude oil futures rising over $50 per barrel.
The eastern Midwest remained dry with little rain expected until the weekend, a private forecaster said. Adding fuel to the late rally were reminders that the yield-devastating soya rust disease was "likely" spreading into other areas of Georgia.
That news was coupled with the June 1 start of the hurricane season, which could increase the chance of rust spreading. The net effect was more weather premium built into the new-crop months, traders said.
July closed 5 cents higher at $6.85-1/4 per bushel, with defenders up 6 to 8-1/2 cents. New-crop November settled 7-3/4 cents up at $6.89-3/4 per bushel.
The market was viewed technically overbought after another strong close. The nine-day relative strength index for the July contract closed at 76 on Wednesday, up from 74 on Tuesday.
Chartists view a level above 70 as an overbought indicator. Even with the dryness in the US eastern crop belt the soya crop was developing ahead of the five-year pace.
The US Department of Agriculture said late on Tuesday 81 percent of the US soyabean crop was planted as of Sunday, compared with the five-year average of 71 percent.
The agency also reported that 50 percent of the crop had emerged, outpacing the five-year average of 45 percent. Export business was lacklustre, with importers turning to cheaper-priced South American supplies.
Taiwan sealed a deal on Wednesday for 60,000 tonnes of Brazilian soyabeans. However, South Korea bought 150,000 tonnes of nongenetically modified US No 1 soyabeans for arrival between February and September next year.
Midwest cash basis bids for soyabeans were steady on Wednesday, with US markets quiet. South American soyabean and soyameal sales picked up as CBOT markets climbed.
The South American soyabean market settled mixed, with July up 2 at $6.82 per bushel. The South American contract continued to lose ground to the US July contract, closing at 3-1/4 premium to SA July.
The soyameal market closed mostly higher on slipover technical strength from soyabeans, with meal hitting an 11-month top. July meal closed 90 cents up at $215.60 per ton, with the deferred $1.50 higher to down 30 cents.
The market closed firm despite weaker US cash soyameal markets. Soyaoil futures rebounded from Tuesday's weakness, with July oil up 0.35 at 23.50 cents per lb., with deferred up 0.10 to 0.40 cent. Malaysian crude palm oil futures fell more than 1 percent on Wednesday on various concerns, from surging output to weak prices of rival soyaoil and a possible currency revaluation.
The benchmark contract broke through support at 1,400 ringgit per tonne.
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