US soybean futures on the Chicago Board of Trade ended higher on Wednesday after prices seesawed throughout the session, with the weakness in the dollar pushing the market higher, traders said. Dry weather concerns in soy producer and exporter Argentina added support.
A weaker dollar is typically a buy signal for US commodities as it makes dollar-denominated commodities more attractive to overseas buyers and lowers the cost to hold grain. Dollar slipped to 13-1/2 year low versus the yen after the Federal Reserve late Tuesday announced a US interest rate cut - zero to 0.25 percent from 1 percent. Overhanging the soy complex was a drop in crude oil, despite Opec's largest production cut ever - 2.2 million barrels per day starting January 1.
An Argentine government spokesman later rejected the local media reports and rumours of the cut in taxes. January soybeans ended 5-1/2 cents a bushel higher at $8.64, meeting resistance at this week's high of $8.77-1/4. Soymeal followed soybeans higher and supported by meal/oil spreading, sparked by falling crude oil.
January meal ended $2.20 per ton higher at $263.20; January soyoil closed 0.35 cent per lb lower at 31 cents. Volume was moderate. Estimated soybean trade was 158,018 futures and 23,541 options. Soymeal volume pegged at 39,587 futures and 1,457 options. Soyoil trade estimated at 69,553 futures and 2,176 options.
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