Soyabean futures at the Chicago Board of Trade surged on Friday, gapping higher on the open on a lower-than-expected quarterly stocks figure released by the government, traders said.
"It was surprisingly low," said Anne Frisk, oilseed analyst with Prudential Securities. November soya closed 12-3/4 cents higher at $5.73-1/4 per bushel, with the defenders up 7-1/2 to 15. Commodity funds bought roughly 6,000 lots. There was some commercial pre-weekend hedge sales, anticipating an active harvest weekend.
But country sales on Friday were less than expected, floor traders said. The US Agriculture Department on Friday said the amount of soyabeans in the hands of farmers and commercial firms on September 1 was 256 million bushels below estimates for 294 million and USDA's latest 2004/05 end stocks estimate of 295 million issued this month.
The September quarterly figure is the last stock number of the 2004/05 marketing year for soyabeans. The stock number reflected a 17 million-bushel cut in the US 2004 soyabean crop to 3.12 billion bushels.
"They reduced production, which we expected, but we also expected to see offsetting reduction in residual usage they didn't do that. So all of a sudden you end up with a lower ending stocks," said one-cash connected trader.
The 2004 US soya crop revision represented a yield cut of roughly 1/2-bushel per acre. "Last year's yield being reduced from 42.5 to 42.2 lowers the base of comparison and probably also has resulted in some scaling back of the yield estimates for this year's crop," Frisk said.
The US soya harvest was moving ahead as conditions were expected to be clear through early next week when rain will move through the belt, Meteorlogix weather said on Friday. Midwest cash basis bids for soya were weak on Friday, as movement should step up amid good harvest weather this weekend, dealers said. The soya products followed soyabeans higher. But soyaoil outperformed soyabeans by the close rallying over 1 cent on month-end positioning by funds, with Revco buying 2,000 December late. Buy-stops were hit in December soyaoil at 23.75 cents.
Funds bought 6,000 soyaoil contracts; commercials were sellers after buying soyaoil most of the week.
"There was more oil/meal spreading everyone has been putting on that spread," one floor broker said.
Solid demand for vegetable oils world-wide amid rising bodiless use has pushed soyaoil to gain on soyameal for at least the past two weeks, traders said.
October soyaoil closed 1.17 cent per lb. higher at 23.72 cents and December was up 1.09 at 23.95 cents. October soyameal was up 10 cents at $167.20 per ton, with deferred up 20 cents to $1.70. A weak tone to US cash soyameal markets looms over futures.
That was underscored on Friday when there were unexpected soyameal deliveries against the October contract on first notice day on Friday. There were 251 lots delivered. Traders expected light to no meal deliveries. An Iowa Grain customer issued 250 lots and a UBS Securities customer stopped 216 lots. An extra lift to soyaoil stemmed from minimal deliveries on the October. There were 131 October deliveries, below estimates for 500 to 1,000 lots.
A RJ O'Brien customer issued 131 lots and a Tenneco customer stopped 112 lots. Malaysian palm oil futures closed higher overnight amid Europe's thirst for bifocals, traders said.
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