Soyabean futures at the Chicago Board of Trade rose on Wednesday on a technical bounce, supported by the strength in corn and soyaoil, traders said. Corn was sharply higher, hitting the 20-cent trading limit, as worries that rain in the US Midwest this week would delay corn planting further. Also, weather forecasting models were in disagreement, adding to the volatility.
The US weather forecasting model called for wetter conditions in the six-to-10-day period, while the European model was drier. "It's a bounce, and probably in sympathy with corn.
At some point the delays to corn planting become bullish on soyabeans, because it also means delays to soyabean planting. I wouldn't have thought that we were at that point yet," said Anne Frisk, oilseed analyst with Prudential Financial. "I'm not surprised that we're bouncing, but I'm surprised with the strength of today's rally," she added.
May soyabeans closed 11-3/4 cents higher at $7.21-1/2 per bushel. The back months were up 9-1/4 to 11-1/2 cents. May corn ended 10-3/4 cents higher at $3.71-1/4 per bushel. Soyabeans were technically oversold going into the session, falling to a near three-month low on Tuesday amid prospects for more US soyabean plantings than originally forecast.
Corn is planted from mid-April to mid-May in the Midwest. If farmers can't get all their intended corn acres in by then, they can switch to soyabeans, which have a shorter growing cycle.
Additional strength to soyabeans was spurred by the soyaoil rally. "Oil at one point was trading 100 points higher, and rapeseed was very strong. I think the same European weather pattern that is affecting wheat is affecting rapeseed," said analyst Roy Huckabay with the Linn Group, referring to the dryness in Europe that was hurting crops.
The crude oil market was also up, climbing more than $1 per barrel, a technical buy signal, traders said. May soyaoil ended 0.86 cent per lb higher at 32.70 cents, with the back months up 0.70 to 0.83 cent.
May soyameal closed $1.70 per ton higher at $192.60, with the back months up 50 cents to $2.70. Volume was large. In soyabeans, an estimated 130,040 futures and 25,300 options traded.
Soyameal trade was pegged at 61,988 futures and 3,514 options. Soyaoil volume was estimated at 56,305 futures and 2,809 options. Commodity funds bought 4,000 soyabean contracts, 6,000 soyameal and 4,000 soyaoil.
The US Census Bureau will release its March crush figures on Thursday. Analysts expect the bureau to report a monthly crush near 155 million bushels, up from 136.9 million crushed in February. US soyaoil stocks were seen growing to roughly 3.4 billion lbs., up from nearly 3.3 billion in February.
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