The Chicago Board of Trade soyabean market rallied to a two-month high on Friday, breaking out of its recent trading range when it gapped higher on the open on speculative buying, traders said.
"There's massive short covering in beans. Of course, it's led by soyabean oil on energy considerations ... crude oil is higher, gold is at new highs - you've got all the inflation factors going here today," said Dan Cekander, analyst with Fimat USDA.
May soyabeans closed 12 cents higher at $5.87-1/4 per bushel. July surpassed it 100-day moving average of $6.01-1/2 but closed just below that level at $6.01 - and down from its day top of $6.14.
Strong CBOT soyaoil prices lent support to soyabeans early as that oil market made contract highs in all months except May. A strong close in soyaoil on Thursday when the July contract broke through the week's previous high of 25.45 cents per lb spilled over to Friday. Prospects for increased demand for soya biodiesel amid rising energy prices remains supportive.
May soyaoil ended 0.37 per lb higher at 25.54 cents and July closed 0.07 cent at 25.72, coming off its contract high of 26.57 as commercial selling surfaced near the close and spurred some speculative short-covering.
Soyameal futures also rallied, following the strength in soyabeans and soyaoil. But meal remains the weakest of the three amid worries about feed demand due to poor pork margins, Russia's temporary halt on chicken imports and the spread of bird flu in Asia overhang the soyameal market. May soyameal closed $1.70 higher at $172.90 and July meal was $1.80 higher at $173.70.
Volume was heavy. An estimated 156,297 soyabean futures and 42,900 options traded. If those numbers are confirmed, Friday would be the sixth largest trading day in CBOT history for soyabeans.
Soyameal volume was estimated at 36,208 futures and 3,634 options. Estimated soyaoil volume was 56,336 futures and 9,229 options.
On a bearish note for soya, heavy rains were expected to move across the US Corn Belt over the next three to five days. That will stall planting and could lead to fewer corn acres as farmers switch to soyabeans - if time and wet fields prevent farmers from getting in all their intended corn acreage.