Soyabean futures at the Chicago Board of Trade closed firm on Monday, with the new-crop months leading the market higher not just 2007 crops but 2008 as well, traders said. Bear spreading in both soyabeans and corn was a feature, traders said. "There was a huge reaction in December '08 corn and November '08 beans, closing firmer and pulling the other markets back.
It's just all spread trade," said Roy Huckabay, analyst with The Linn Group in Chicago. Some traders jokingly said the market was already worried about 2008 US crops and Midwest farmers haven't even started planting 2007 corn and soyabeans.
Prospects of fewer US soyabean plantings in 2007 remain a supportive feature as farmers are expected to plant more corn due to its attractive price versus soya, traders said. New-crop corn gained on old-crop on prospects for a slow start to this year's planting season due to wet weather. Given the strength in new-crop corn, soyabeans followed, traders said.
Front-month May soyabeans ended 6 cents up at $7.59-1/2 per bushel. The old-crop July/new-crop November soya spread weakened 3-1/4 cents, with November closing at 27-3/4 cent premium to old-crop July. Ample supplies of nearby soyabeans hung over the old-crop months. November 2007 soya closed 9-1/2 cents up at $8.03 per bushel, reflecting the market's incentive for farmers to plant US soyabeans.
December 2007 corn settled 3 cents up at $4.06, while old-crop July ended 3/4 cent weaker at $4.10. An even wider price distortion took place in the 2008 crop years. November 2008 soyabeans closed 22 cents higher at $8.11. December 2008 corn was also strong, up 8-1/4 at $3.93-1/2.
The product markets also ended higher. The strength in soyabeans was supportive, with the new-crop months in both soyaoil and soyameal the strongest. A mild bounce in crude oil and commercial pricing in soyameal added support, traders said. May soyameal ended $1.50 per ton higher at $219.50, with the deferred months up $1.30 to $4.90. CBOT soyaoil settled 0.22 to 0.80 cent per lb higher, with May 0.22 cent higher at 30.99 cents per lb.
Volume was on the lighter side. In soyabeans, an estimated 85,936 futures and 14,403 options traded. Estimated soyameal trade was 24,373 futures and 1,250 options. Soyaoil volume was pegged at 17,331 futures and 543 options. Commodity funds bought about 1,500 soyabean contracts, 1,500 soyaoil and 1,000 soyameal, traders said.
Weekly export inspections for soyabeans were low but came in within expectations. USDA reported that 21.2 million bushels of soyabeans were inspected for export last week, compared with estimates for 20 million to 25 million bushels.
Trade data issued by the Commodity Futures Trading Commission late on Friday showed that large speculators expanded their net long positions in the CBOT soya complex. Managed funds expanded their net longs in CBOT soyabeans during the week ended March 13 by 10,700 contracts to 64,000, according to the CIT supplement.
In soyaoil, large speculators net long position increased by 10,000 lots to 59,700. Soyameal futures/options managed funds' net long position increased by 4,100 lots to 38,000. Spot US Midwest basis bids for soyabeans were steady on Monday, with sales very quiet, dealers said. US cash markets remain historically weak as customers turn to Brazil for fresh supplies, traders said. However, weekend rain in Brazil was slowing its harvest and crop weather in Argentina was favourable, DTN Meteorlogix said.