Chicago Board of Trade soyabean futures climbed early on Tuesday as the soya/corn spread adjusted some, traders said. The current price relationship between the two commodities was encouraging farmers to plant a lot more corn next spring and fewer soyabeans.
The soya market's movement higher could prevent further losses in soya acres. The soya market opened firm and was the first to build strength. But corn quickly awoke, turning higher. Also, commercials including processor Bunge were buying soyabeans, traders said.
January soyabeans was up 7-1/4 cents per bushel at $6.64-3/4 per bushel by 11 am CST (1700 GMT). The back months were up 5 to 8 cents. November soya, which expires at 12:01 pm CST, was up 6 cents at $6.52-1/2. Open interest in the November contract stood at 1,852 lots before the open. There were 893 lots delivered against the November contract on Tuesday morning and a commercial trade house Term Commodities stopped 433 lots.
Traders were waiting to see if the contract turns volatile near expiration as there have been heavy deliveries throughout the delivery period and limited commercial stopping. That could lend to volatility as expiration approaches, they said.
The market was trading above all key moving averages and key resistance in January soya was pegged at $6.68. The monthly crush figure released by the National Oilseed Processors Association before the open was supportive but within trade estimates. The industry group said its members crushed nearly 155.0 million bushels of soyabeans in October, compared with estimates for 151.5 million to 160.0 million. That was above the 151.0 million bushels crushed in October of 2005.
The USDA reported late Monday that the US soya harvest was 94 percent complete, in line with trade estimates and the five-year average. However, the eastern belt remains behind normal and this week's rains will add to delays, raising concerns about potential crop losses, said Meteorlogix weather service.
CBOT December soyameal was up $1.60 per ton at $193.40, with the back months up $1.30 to $1.70. December soyaoil was up 0.40 cent at 28.39 cents per lb. The back months were up 0.08 to 0.42 cent. Malaysian palm oil futures closed mixed.
Oil World said on Tuesday that China has made unusually large purchases of Argentine and US soyaoil recently but may turn to palm oil because of rising soya prices.
In soyabeans, large speculators were long 75,803 lots, up 7,747, and short 33,424 lots, down 2,278 lots. In soyameal futures/options, funds were long 47,109 lots, up 4,310, and short 16,313 lots, down 4,682 lots. For soyaoil, large speculators were long 60,455 lots, up 9,893, and short 12,548 lots, down 1,988 lots.
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