Soybean futures at the Chicago Board of Trade closed firm on Thursday amid technical buying and the strength in soyoil, traders said. November soybeans closed 5-3/4 cents higher at $6.27-3/4 per bushel. The back months were up 4 to 9-1/2 cents.
December soyoil ended 0.46 cent per lb higher at 27.04 cents, the deferreds up 0.35 to 0.46 cent. Soyoil was supported by a smaller than expected US soyoil stocks number issued by the US Census Bureau before the open. Soymeal settled 80 cents to $3 per ton higher, with December up 90 cents at $186.10.
For the first time in many weeks, soybeans underpinned the CBOT grain trade. The price spread between soybeans and the grains was out of whack this season - moving to historically tight levels as wheat and corn gained on soybeans. The grains rallied on outlooks for wheat and corn stocks to shrink while soybean stocks were projected to be at an all-time high.
"There have been a huge number of people long corn/short everything - long corn/short beans, long corn/short wheat," said Roy Huckabay, analyst with The Linn Group in Chicago.
Perceptions that firms would begin rolling their December long positions in corn, sparked some firms to liquidate their intermarket spreads, he said. The soy/grain spreads corrected some on Thursday as soybeans climbed and wheat and corn fell. Corn rebounded late, with December ending unchanged. Among the featured players was J.P. Morgan buying 1,500 beans and selling 3,000 corn.
The surge in corn prices over soybeans this fall was encouraging farmers to plant a lot more corn and the expense of fewer soy acres next spring. Traders said the market's ability to hold $6.20 in November soybeans on the open was supportive. They had been eyeing $6.20 ahead of Friday's expiration of November options as open interest was still large at that strike price. Open interest in the $6.20 November options was roughly 11,000 lots as of the open.
Commodity funds bought about 6,000 soybean futures with Fimat USA featured buying 1,000 January soy and 1,300 December soyoil. Fimat also was aggressively buying November 2007 soy call options, traders said. Commercials were buying soyoil with Bunge, Term Commodities and ADM among the list of oil buyers.
Soybeans were higher despite weekly exports sales data released on Thursday that came in on the low end of expectations and a smaller-than-expected September crush reported by the US Census Bureau.
The US Agriculture Department reported that 627,100 tonnes of soybeans were sold for export last week, compared with estimates for 600,000 to 800,000 tonnes. Nearly half the sales - 297,800 tonnes - went to China, the world's top buyer of soy. China was also the biggest shipper with 553,600 tonnes.
Monthly crush data was bearish for soymeal as stocks were much bigger than traders expected. While export sales data for soymeal was mediocre, coming in at the low end of estimates. US soyoil export sales were disappointing.
USDA reported that 101,200 tonnes of soymeal were sold for export last week, compared to estimates for 100,000 to 175,000 tonnes. US soyoil export sales last week were 2,100 tonnes, versus estimates for 15,000 to 30,000 tonnes. Census reported on Thursday that US processors crushed 142.3 million bushels of soybeans in September, which was below estimates for 143.3 million to 144 million bushels.
US soymeal stocks in September were 320,032 tons, Census reported. That figure was above the average trade estimate for 251,500 tons and USDA's 2005/06 end stocks estimate of 300,000 tons. Census also reported September US soyoil stocks at 2.968 billion lbs, below trade estimates for 2.980 billion to 3.10 billion.
"The drawdown in stocks of oil and the correction last month ... down 45 million pounds all points to a strong oil demand," Huckabay said. Malaysian palm oil closed higher after a short holiday break this week. Volume in soybeans on Thursday was estimated by the CBOT at 140,300 futures and 32,485 options. The exchange reported Wednesday's official volume at 184,793 soybean futures, the fourth highest in CBOT history. Soymeal volume on Thursday was estimated at 36,814 futures and 2,014 options. Soyoil volume was estimated at 38,232 futures and 4,340 options.
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