Soyabean futures on the Chicago Board of Trade ended up sharply on Wednesday following a fresh surge in crude oil markets while soyaoil soared to new contract highs and near 33-year highs, traders said. Traders said the soya complex rallied as crude oil abruptly surged following the release of a US government report showing a surprising drawdown of US crude oil stocks.
"Basically it's the surge in crude oil that took soyaoil up to new highs and supported the rest of the market," said Mario Ballot, analyst for Citicorp. CBOT soya closed 4 to 18 cents per bushel higher, with November up 18 at $10.10 per bushel.
Commodity funds were net buyers of 5,000 lots. Contract highs were hit in March, May and July. Slow farmer selling and strong cash basis markets, especially at US Midwest River locations, also were supportive for soya, along with lighter-than-expected deliveries on the bellwether new-crop November contract.
However, potential remained for continued volatile trade as other outside markets, such as gold and the dollar, turned volatile. The dollar fell to a fresh record low on Wednesday, a bullish signal for US grains and soya, but the currency then began climbing after a report showing healthy growth of the US economy.
Support for soya, especially nearby November, stemmed from a small volume of soya posted for delivery on that contract. On Wednesday was first notice day for deliveries on November and traders were expecting a heavy delivery total from 1,000 to 2,000 lots.
But the CBOT said deliveries on November totalled only 355 lots, an indication that the abundant stocks of US soya remain in strong hands. Favourable weather continues in Brazil and in Argentina's soyabean-growing areas, forecaster DTN Meteorlogix said.
And mostly favourable weather was expected for the remaining harvest of corn and soya crops in the US Midwest, Meteorlogix said. Technical traders were eyeing key support for November at its 20-day moving average of $9.74-1/2 per bushel and the nine-day relative strength index closed on Wednesday in neutral territory at 63. Volume on Wednesday was heavy at an estimated 196,435-soyabean future and 23,548 lots, the third-highest daily total on record, CBOT data showed.
Soyameal closed $4.90 per ton higher to 70 cents lower, with December up $4 her with the markets trailing the strong rally in the crude oil market. Soyaoil was up 0.35 cent to 1.02 cents per lb., with December up 0.63 at 42.31 cents. December rallied to a new contract high of 42.69 cents per lb., which is also the highest price for a spot contract in nearly 33 years.
Soyaoil followed the strong rally in crude oil. Soyaoil volume was estimated by the CBOT at 63,657 futures and 11,097 options. Soyameal volume was estimated at 41,806 futures and 1,745 options.
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