The Chicago Board of Trade soyabean market ended firm on Wednesday on follow-through technical buying from Tuesday, but slipped near the close as soyameal dipped, traders said.
"They were thinly traded markets meal found pressure late and it spilled over to beans.
Otherwise it was very dull, we have to wait for Friday's report" when USDA releases its first US 2006/07 stocks estimate, one CBOT trader said. Underpinning prices and giving the market an early lift was an inflow of speculative money.
Some firms were covering short positions while others initiated fresh longs. Investors are attracted to commodities as they look to hard assets as a hedge against inflation. Also supportive were prospects that US soyabean exports could pick up as country movement in Brazil, a competitor for export business was stalled due to farmer protests now in their third week.
Brazilian farmers were not selling their freshly harvested soyabeans as they protested the low price their soyabeans are fetching due to the strength of the Brazilian real against the dollar. A national protest is planned for May 16.
May soyabeans, now in delivery, closed 3/4 cent higher at $5.93-1/4 per bushel.
The more actively traded July contract ended 1-1/2 higher at $6.06, after it surpassed its 200-day moving average of $6.09 and reached $6.11.
"We keep running into a roadblock at $6.14-1/2," said Vice Lespinasse, floor broker with A.G. Edwards. That was last week's high in July and a key resistance point. May soyameal ended 90 cents down at $178.60 per ton and July was off 70 at $178.80.
Traders took profits after the spot contract hit a two-month high. CBOT soyaoil ended firm, supported by the strength in crude oil, recovering from commercial bean oil sales. Term Commodities sold 1,100 July but commercial Bungle bought 600 July late, traders said.
Soyabean oil continues to follow the volatility in the energy markets on outlooks for an expanding bifocals market. May soyaoil closed 0.25 cent higher at 24.95 cents per lb, July ended 0.20 up at 25.28.
The July crush ended 0.84 cent lower at 65.44 cents/bushel.
Funds bought about 2,500 soyabean contracts, 1,500 soyaoil and sold 500 soyameal, traders said.
On a bearish note, there were reminders of large world oilseed stocks. States Canada said on Wednesday that Canadian canola stocks on March 31 were record 5.1 million tonnes.
The US Agriculture Department on Friday will release its first US 2006/07 soyabean end stocks estimates. Traders expect US soyabean supplies to grow to a new record, with estimates ranging from 625 million to 729 million bushels surpassing the current 2005/06 record, projected at 565 million bushels.
The jump in supplies reflects expectations for a huge US soyabean harvest this fall and lagging export as South America sells more soyabeans. US Midwest spot basis bids for soyabeans were mostly steady on Wednesday, with country sales slow, dealers said.
There was another round of large soyabean deliveries on Wednesday, a sign of ample supplies. There were 979 May soyabean deliveries, which were met by scattered stopping. CBOT soya registrations fell to 3,819 lots late on Tuesday, from 3,854.
There were no deliveries on the May soyameal contract, while there were 661 May soyaoil deliveries. But the oil postings were met by strong commercial stopping, with the ADM house account taking 118 lots and the Term Commodities house stopping 157.
A Man Financial customer stopped 322 lots. CBOT soyameal registrations were unchanged at 31 lots late on Tuesday. Soyaoil registrations were also unchanged at 6,688 contracts.
Malaysian palm oil futures closed flat to weak, pressured by lower exports for the first 10 days of May.
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