Fund short covering amid oversold technical signals boosted Chicago Board of Trade soybean futures on Tuesday, traders said. CBOT soy was up 4-1/2 to 10-1/4 cents per bushel. September was up 10 at $6.04 per bushel. New-crop November was up 10-1/2 at $6.16-1/2 per bushel.
Pit sources said UBS Warburg bought between 600 and 700 November and FIMAAT Futures bought 700 November. Traders said some funds were covering their short positions because the market had become technically oversold after its fall last week to six-month lows.
Technical traders were eyeing support in the November contract at $5.95 per bushel. Resistance at $6.13 was broken, driving the contract to a session high of $6.19, just above key resistance at its 200-day moving average of $6.18-1/4. Buying waned at that level.
The nine-day relative strength index for November closed Monday at 32. Technical traders view an RSI of 30 or less as an oversold market and 70 or more as an overbought market. Concerns that heavy rains as a result of Hurricane Katrina might harm some of the US soy crop may have given the market a bit of a lift in addition to news that China had bought 10 cargoes of soy last week at the current lower price levels.
Heavy rainfall was expected Tuesday and overnight Tuesday in the southern portion of the eastern US Midwest crop region, a private forecaster said on Tuesday. Soymeal was 30 cents to $3.30 per ton higher following the climb in soy. September was up $1.80 at $186.10 per ton. Registrations of soymeal with the CBOT were unchanged at nil. Soyoil was 0.71 to 0.78 cent per lb higher with September up 0.74 at 22.98. Registrations of soyoil with the CBOT were unchanged at 2,934 lots.
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