Soyaoil futures at 23-year high

The Chicago Board of Trade soybean market set back on Tuesday after its recent charge higher on the government's outlook for a smaller US soy crop, traders said. "The market is under pressure from the rains in South America. The coverage is a little better for northern Brazil - they're a little more optimistic they'll get the area planted," said one CBOT trader.
Traders have been most concerned about Brazil's No 1 soy state of Mato Grosso, which has been hot and dry this season, stalling early soy planting. The area received good rains, over an inch in some areas since the weekend, which extended into Parana which has also been dry, said DTN Meteorlogix forecaster Mike Palmerino. Light scattered showers were expected for Mato Grosso over the next seven days.
November soybeans ended 9-1/2 cents per bushel lower at $9.77-1/2, holding above nearby support at its 20-day moving average of $9.71. January soy was down 9 at $9.96-3/4. The soyoil market was the strongest of the CBOT grains and soy complex, lifted by China's purchase of 20,000 tonnes of 2007/08 US soyoil confirmed by USDA and the sizzling crude oil market. Crude oil reached an all-time high of $88.20 a barrel on a weak dollar and mounting tensions in the Middle East.
Soyoil hit a 23-year high in the spot contract of 40.49 cents per lb overnight and notched contract tops in all the back months, brushing off the weakness in the other CBOT markets. December soyoil ended 0.17 cent higher at 40.23 cents. The soymeal market closed $2 to $5.30 per ton lower, with December down $5.30 at $275.90, following the weakness in soybeans.
Meal was also under pressure from oil/meal spreading. Commodity funds sold 5,000 soybean contracts, 2,000 soymeal and bought 1,500 soyoil. Additionally, there was scattered commercial hedge sales in soybeans.
The US soybean harvest is moving along, ahead of the seasonal average. But rains this week will stall farmers temporarily, especially in the western belt, forecaster Palmerino said. USDA reported late Monday that 66 percent of the soy crop was harvested, compared with the five-year pace of 65 percent for mid-October.
Midwest basis bids for soybeans were firmer at river locations, reflecting a slowdown in harvest due to rains and a drop in barge freight along Midwest rivers.