Chicago Board of Trade soybean futures rose sharply in post-holiday trade in Asia on Tuesday, supported by active short-covering after sharp losses last week. Easing worries about the US soybean crop after light rain in the top soy state of Illinois last week prompted heavy liquidation from fund operators, traders said.
Still, Illinois remained dry, with just light showers in the forecast for early this week, making funds careful about unwinding their positions too heavily, they said.
"The short-covering mood is continuing from last week and it is pushing up prices sharply," said a trader at a Japanese commodity brokerage.
"But I think the market is still in a corrective phase to test the downside."
The trader added that the market would want to see if the prompt July and August contracts could be supported at $6.50 in the near term.
As of 0123 GMT, the benchmark July CBOT soybean contract was trading up 11-1/2 cents per bushel at $6.85.
New-crop November was trading up 11-3/4 cents at $6.97-3/4. It rose as high as $7.02 at one point in early trade.
The US market was closed for the Independence Day holiday on Monday.
On Friday, July soybeans closed 21-3/4 cents per bushel higher at $6.73-1/2. New-crop November was up 19-3/4 at $6.86.
In China, soybean prices advanced in Dalian in line with gains on the CBOT.
The most active November contract was up 30 yuan at 3,053.
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