Chicago Board of Trade soyabeans rose to a two-month high on Wednesday, tracking the moves of the volatile wheat market, traders said. "Everyone was watching wheat. We went through some averages then beans took off," said one CBOT floor broker.
November soyabeans surpassed their 10- and 20-day moving averages of $5.47-$5.48 and approached their 50-day MA of $5.63-1/2. November soyabeans closed 12-3/4 cents higher at $5.55-1/4, after escalating to $5.62 the highest price for the spot contract since August 10. The back months ended 9-3/4 to 12-1/4 cents higher. But most of the action was in wheat. The wheat market went through the roof as a mix of supportive fundamental news and strong Technicals drove the price of wheat to a 10-year high.
"There's more money pouring into the markets," said one veteran floor broker, referring to a fresh wave of commodity fund flowing into CBOT markets, especially the grains. There was industry talk that funds are getting out of the energy markets and buying grains, traders said.
Soyabeans were range-bound and underpinned by a pickup in export business. The US Department of Agriculture confirmed on Wednesday that China bought 116,000 tonnes of US soyabeans in the past day. Also, South Korea on Wednesday reissued a tender to buy 50,000 tonnes of non-GMO US soyabeans. Additionally, the market was technically oversold and due for a bounce.
But harvest pressure and outlooks for US farmers to harvest one of their largest crops in history overhang the market. Reports continue of exceptionally large soyabean yields, traders said. Chicago brokerages house The Linn Group issued its US soyabean crop estimate this week, pegging the crop at 3.272 billion bushels with an average yield of 44.25 bushels per acre.
That's above USA's September outlook of 3.093 billion bushels and an average yield of 41.8 bpa. The government will update its crop estimate on October 12. Farmers should make good progress harvesting crops this week as the Midwest weather looks wide open with little rain in the forecast, Meteorlogix weather service.
The eastern belt could see light rain mid week but then conditions turn clear through next week. Spot basis bids for soyabeans were steady to mixed in the Midwest on Wednesday amid scattered movement as farmers were starting to bring in freshly harvested supplies, dealers said.
The products were higher following the trend across all CBOT age markets. The strength in the energy markets added support to soyaoil, which ended higher for the first time in nearly a week.
October soyaoil closed 0.24 cent higher at 23.52 cents per lb, and December was up 0.13 lower at 23.80 cents. October soyameal ended $4.60 per ton higher at $165, December soyameal closed $4.40 up at $167.10. The January crush ended 1-1/2 cent down at 65.97 cents/bushel. Casting a bearish tone to soyaoil was the drop in Malaysian palm oil futures overnight.
Volume was heavy. In soyabeans, an estimated 99,923 futures and 20,628 options traded. Soyameal trade was pegged at 30,260 futures and 3,819 options. Estimated soyaoil volume was 45,263 futures and 5,004 options.