The Chicago Board of Trade soyabean market climbed to a three-month top on Thursday, taking its cue from the hot metals market as gold soared to a 25-year high, traders said.
The strength in the energy markets added support to soyabeans and soyaoil amid projections for a growth in the soya biodiesel industry.
Speculative money continues to flow into the commodity markets as investors turn to hard assets like gold and grains amid inflationary fears.
"It's very similar to the '79-'82 market when metal markets soared. The grain prices had solid footing under them, land prices soared," said Don Roose, president of US Commodities.
"Fundamentally you should be closer to $5 in beans, unless you think the whole scale has moved up ... that's the only logical explanation you're left with today," he said.
Soyaoil was the strongest of the complex, gapping higher on the open and ending over 1.0 cent per lb up across the board.
May soya, which stops trading on Friday, ended 9-1/2 cents higher at $6.02-3/4 per bushel. The more active July contract closed 7 higher at $6.13. July pushed through $6.14-1/2 resistance, triggering buy-stops late.
May soyabean oil ended 1.02 cent up at 25.97 cents per lb, July was 1.04 cent higher at 26.32.
Soyameal lost ground to soyaoil amid oil/meal spreading. May meal ended 80 cents down at $177.80 per ton and July was 10 lower at $178.70. Local traders and R.J. O'Brien were featured spreading oil/meal, traders said. The July crush ended 4.22 cents higher at 69.66 cents per bushel.
The product value of July soyaoil in relationship to soyameal grew to 42.4 percent on Thursday. Typically, soyaoil makes up 38 to 40 percent of the combined value of meal and oil. But the aggressive interest in soyabean oil by commodity funds has driven it to historical levels.
Funds bought about 7,000 soyaoil contracts, 5,000 soyabeans and were even to net sellers of 500 soyameal.
The day's volatility came before Friday's USDA May monthly report, which should show record soya end stocks estimates. Analysts expect USDA to peg US old-crop soya ending stocks close to the current record of 565 million bushels estimated in April. But the focus will be on the first 2006/07 end stocks estimate. Analysts expect USDA to put the new-crop end stock forecast from 625 million to 729 million bushels.
USDA's export sales report was mildly supportive for soyabeans, above the trade's somewhat low expectations.
USDA said export sales of US soya last week totalled 389,800 tonnes (old-crop/new-crop), above estimates for 150,000 to 250,000 tonnes. The tally did not include any sales to the world's top soyabean buyer, China. But export traders said the 61,000 tonnes to unknown was likely China.
Export sales for soyameal were within expectations and disappointing for soyaoil.
Last week's US soyameal sales were 64,600 tonnes (old-crop/new-crop), USDA said. That compared to trade estimates for 50,000 to 125,000 tonnes.
USDA said US soyaoil export sales last week were 1,900 tonnes (old-crop), vs. estimates for 1,000 to 10,000 tonnes.
In export news, Taiwan passed on a tender to buy 12,000 tonnes of US soya. Iran bought 20,000 tonnes of Brazilian soyaoil.
Some support stemmed from concerns about a cold, wet spell forecast for parts of the Midwest that could slow crop emergence and growth.
Midwest spot soyabean basis bids on Thursday were steady early Thursday before country sales picked up when the CBOT rallied, dealers said.
In the delivery market, there were 552 May soyabean deliveries and 434 soyaoil deliveries. They were met by scattered stopping but commercial ADM took 222 soyaoil lots. There were not soyameal deliveries.
Malaysian palm oil futures closed firm.