US MIDDAY: soyabeans rally

US soyabean futures on the Chicago Board of Trade rallied early on Friday after USDA cut its 2007/08 US soyabean ending stocks forecast in its monthly report, traders said. "They dropped the bean ending stocks, a little below the trade range," said one CBOT trader.
USDA cut its forecast for this season's US soya stocks by 15 million bushels to 160 million - the lowest stocks since 2003/04. The government also dropped its US wheat ending stocks figure by 20 million bushels to 272 million, which is a 60-year low. The expected strength in wheat was added to the buying in soyabeans, traders said.
"It's still all about wheat," a veteran grain trader said. "To be honest, no one cares about the report. People are blowing out of positions - they can't make their margin calls. It's a big, big problem."
The red-hot commodities market was making it difficult for grain merchandisers to hedge their cash positions via short futures positions. The escalating CBOT markets were increasing margins to hold short futures, traders said.
It has been an ongoing situation in the US grain industry for months, but concerns were intensifying early Friday after the US wheat markets had been limit-up all week.
March soyabeans were up 32 cents at $13.63-1/2 a bushel by 11:10 am CST (1710 GMT). The products were also strong, following soyabeans. A rally in crude oil also helped lift soyaoil. But meal was gaining on oil after USDA boosted its ending stocks forecast for soyaoil, traders said. March soyameal was up $7.50 per ton at $369.20 and March soyaoil was 0.79 cent firmer at 55.91 cents per lb.
USDA left its US 2007/08 soyameal ending stocks forecast unchanged at 300,000 tons while boosting its soyaoil estimates to 2.502 billion lbs from 2.252 billion. The jump reflected a 400 million-lb reduction in the amount of soyaoil used to produce biodiesel. "The fact that they reduced the biofuels on the oil is a bit bearish for oil versus meal," said the CBOT trader.
Traders were continuing to watch South American weather. Scattered showers were seen for the hotter and drier areas of Brazil and drier weather was coming for the areas that have seen excessive wet weather, DTN Meteorlogix said. Satisfactory crop weather was seen for Argentina. Midwest basis bids for soyabeans were steady to firm in several locations early Friday, cash dealers said. But there were scattered reports of some elevators discouraging sales before the CBOT markets opened.