Soybean futures at the Chicago Board of Trade surged on Tuesday, rising to fresh three-year highs amid brisk export demand, especially from China, traders said. But soyoil futures fell as crude oil slumped on signs that the surge to nearly $100 a barrel will dent global demand.
Front-month November soybeans closed up 11-1/2 cents at $10.44-1/4 per bushel after reaching $10.49, the highest spot price since 2004. Most-active January ended up 10 cents at $10.56-1/4 after hitting a contract high at $10.62-1/4.
CBOT December soyoil fell 0.23 cent, or 0.5 percent, to close at 44.23 cents a lb. "Soybeans are supported by strong demand. There is talk that China will import 1.5 million to 2 million tonnes of soybeans in January, and all of that could come from the US," said analyst Joe Victor of brokerage Allendale Inc.
Traders said there has been strong evidence of a pick-up in demand for soybeans from China, the world's top importer of the oilseed that is crushed into animal feed and cooking oil.
The Chinese demand has been linked to the country's attempt to keep a lid on inflation, which was at a near 11-year high in October due to soaring food costs.
On Tuesday, the US Agriculture Department confirmed the sale of 107,000 tonnes of US soybeans to China. Traders said CBOT soybean futures were also supported by drier than normal weather in north-eastern Brazil, the world's No 2 producer and exporter of soybeans after the United States.
There was also support from a private estimate by analytical firm Informa Economics, which lowered its forecast of US 2008 soybean plantings to 68.1 million acres, down from its October estimate of 71.7 million acres. Soymeal futures closed higher, following soybeans, with December rising $4.90 to close at $285 per ton.
But soyoil was the laggard of the soy complex, sinking under pressure from the drop in crude oil. More supplies of soyoil are being used to produce biodiesel. US December crude oil futures fell $3.45, or 3.6 percent, at $91.17 a barrel after the International Energy Agency cut its forecast for world oil demand growth.
Traders said soyoil prices were currently well above the break-even level to profitably produce biodiesel, adding that Tuesday's decline would help in it become competitive again. On a bullish note, Australia's forecast canola crop, widely used as cooking oil in Asia, has been cut by a further 10 percent because of drought, the Australian Oilseeds Federation said.
The US soybean harvest was nearly complete. After the market closed, USDA said the harvest was 97 percent done, ahead of the five-year average of 94 percent. In the delivery market, 222 contracts were delivered against the November soybean contract. The Rosenthal Collins and Term Commodities house accounts issued 123 and 99 contracts, respectively, while customers of Banc of America Securities and J.P. Morgan stopped 105 and 99 lots.
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