Chicago Board of Trade soyabean futures reached a near three-week high as crop worries due to heat and dryness in the southern US Midwest fuelled a rally, traders said. "The weather contributed to it then the technical took off from there and allowed the market to run quicker than we thought," one CBOT trader said.
New-crop November broke through its 50-day moving average of $8.65-3/4 per bushel, then climbed 16-1/4 cents to $8.79 before finding resistance. The soya market through November 2008 closed 11-1/4 to 15-1/2 cents higher. Front-month August, now in delivery, ended 16-1/2 up at $8.55.
The more active November contract closed 15-1/4 higher at $8.78. Crops in the southern Midwest were suffering from extreme heat, with highs climbing into the 100s degrees Fahrenheit. The southern crop belt also missed out on the good rains that moved through the upper Midwest since the weekend, raising prospects for crop conditions in the central and southern belt to decline further, traders said.
Midday forecasts turned a little drier, which kept prices strong into the close, Chicago floor traders said. The products followed the strength in the weather-driven soya market.
Speculative buying by commodity funds was supportive to soyaoil while commercial pricing in meal gave it a lift, traders said. August soyameal closed $4.30 per ton higher at $230.30, with the deferred up $1.70 to $4.60. Soyaoil ended 0.36 to 0.55 cent per lb. firmer; August was up 0.50 at 37.22 cents per lb.
Commodity funds bought 6,000 soyabean contracts, 2,000 soyameal and 3,000 soyaoil. Commercials bought 1,000 meal contracts; Cargill, Bungle and Rosenthal Collins were among the buyers, traders said. Volume was on the lighter side. Estimated soyabean trade was 89,274 futures and 30,562 options. Soyameal volume was pegged at 34,734 futures and 2,163 options.
Soyaoil trade was seen at 44,429 futures and 9,423 options. Firms were also covering short positions before USDA issues its August crop report on Friday.
This will be the government's first estimate of 2007 soyabean production based on field surveys. Analysts' estimates of what USDA will forecast ranged from 40.3 to 43.0 bushels per acre compared with the government's July estimate of 41.5 bpa.
Midwest spot basis bids for soyabeans were steady to firm late on Wednesday, underpinned by slow farmer sales, dealers said. In the futures delivery market there were moderate to heavy August deliveries but there were signs of strong commercial stopping, a supportive sign.
There were 1,469 August soyabean deliveries, with a UBS customer taking 543 lots. In soyameal, there were 130 deliveries with a Man Professional Clearing customer taking 129.
Soyaoil deliveries were lighter than recent days at 406 lots, with the Term Commodities house account taking 219. On the export front, Iran bought an unknown amount of Brazilian or Argentine soyaoil in a tender for up to 35,000 tonnes, European traders said. Egypt's GASC bought about 10,000 tonnes of soyaoil and 9,000 tonnes of sunflower oil, European traders said.
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