US MIDDAY: soyabeans rally on technical bounce

20 Jan, 2005

Soyabean futures at the Chicago Board of Trade climbed early Wednesday, led higher by the nearby month amid logistic delays in moving beans to export facilities, traders said. March soyabean futures were 7-1/4 cents higher at $5.20-3/4 per bushel by noon CST (1800 GMT). The back months were 3-1/2 to 6-1/2 cents higher.
The March/May spread was firming as cash movement remained light, traders said. Logistic hang-ups in moving grain to the US Gulf Coast were keeping supplies tight at export terminals, making it difficult to meet demand.
The market was also due for a technical bounce after trending lower over the past week, traders said.
The market approached technically oversold conditions, with the nine-day relative strength index for March soyabeans closing at 31 on Tuesday. An RSI of 30 or below is viewed as a technically oversold market by traders.
CBOT soyabean prices have been pressured by outlooks for large global supplies, especially with South American weather conducive to crop development. Weekend rain over Rio Grande do Sul, Brazil, was also alleviating concerns about dryness in the No 3 Brazilian soya state.
Soyameal futures were also higher, with the March contract posting the biggest jump - up $3.10 at $156.80. Firm spot US cash meal markets lent support to March, underpinned by processors bidding up for beans, trying to spark country movement.
Feed demand was also picking up as cold weather blanketed the US Midwest.
There were no soyameal deliveries against the expired January contract.
Soyaoil futures were 0.10 to 0.21 cent per lb. higher, with March up 0.21 cent at 19.65 cents. The rally in soyabeans was supportive. But the soyaoil market was also due for a technical bounce after a series of contract lows over the past week, pressured by large global supplies of vegetable oil.

Read Comments