Soyabean futures at the Chicago Board of Trade closed higher on Thursday but significantly off their highs as profit-taking and commercial hedge pressure weighed on prices late, traders said.
November soyabeans settled 3-1/4 cents higher at $6.48-1/4 per bushel, down from its top of $6.68. January ended up 3 at $6.61-1/4. The soya market soared climbing more than 20 cents per bushel, or 4 percent on technical buying following the strength in corn. Contract highs were made across the board. The Chicago corn market hit a 10-year top when December corn rose the 20-cent trading limit.
"It's mainly following corn. It's the competition for acreage for 2007," said Dan Cekander, analyst with Fimat USA. Soya tried to keep pace with corn amid a battle between the two commodities to secure enough acres for next year's crops.
The current price relationship between corn and soyabeans is encouraging farmers to plant a lot more corn at the expense of fewer soyabeans. Corn rallied on Thursday amid private forecasts that pegged this year's US crop below USDA October estimates.
"There was some farmer selling of corn and soyabeans here and in South America" as prices rallied, said one CBOT floor broker. Soyabeans soared even though analysts expect this year's US crop to be a bin buster. The trade is focused on the long-term outlook.
Brokerage firm FC Stone late on Wednesday pegged the US soya crop at 3.268 billion bushels, above USA's forecast in October for 3.189 billion an all-time high if realised. Analytical firm Informa Economics also released its crop estimates on Thursday, which was above USA's October forecast, traders said.
Informa forecast the 2006 US soya crop at 3.246 billion bushels, traders said. USDA will issue its next crop estimate on November 9. Weekly exports sales data for soya was mediocre, coming in within expectations. The government reported that 640,200 tonnes of US soyabeans were sold for export last week, compared with estimates for 550,000 to 750,000 tonnes. Midwest spot basis bids for soyabeans were mixed on Thursday amid scattered harvest sales, dealers said.
A break in the weather this week was allowing farmers to push along on harvest, especially in the eastern Midwest where it has been unseasonably wet. There were 617 November soyabean deliveries, which were met by strong commercial stopping. The ADM house account put out 400 lots and stopped 546.
The products were strong on technical buying, but also fell from their highs when soya backed off. December soyameal closed $2.20 higher at $195.30 per ton, with the backs up $1 to $2.80.
December soyaoil settled 0.03 cent per lb higher at 27.50 cents, with the deferreds up 0.01 to 0.05. Several of the deferred meal and oil contracts made new highs. Activity of the commodity funds continues to dominate trade. Funds bought 5,000 soyabean lots, 5,000 soyameal and 3,000 soyaoil.
Export sales were disappointing for soyameal and came in within expectations for soyaoil. USDA on Thursday said export sales of US soyameal last week totalled 58,300 tonnes, below trade estimates for 75,000 to 150,000 tonnes.
US soyaoil export sales were at 5,800 tonnes, within estimates for 2,000 to 8,000 tonnes. The US Census Bureau reported on Thursday that US soyaoil stocks were at 2.968 billion lbs. in September, unchanged from its preliminary estimate issued last week and below August stocks of 3.061 billion. Methyl ester use of soyaoil was 176 million lbs. in September, down from the upward August revision to 186 million lbs.
Soya analysts closely watch the methyl ester use category, as it's an indication of the amount of soyaoil used in production of soya biodiesel. Malaysian palm oil futures closed higher.
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