Soyabean futures at the Chicago Board of Trade rallied on Monday, recovering from a sell-off that started on Friday when corn fell the 20-cent limit on the government's forecast for big 2007 corn plantings, traders said.
Soyabeans were pressured on Friday and Monday by the tremendous weakness in corn, traders said. Corn dropped the 20-cent trading limit both days but the soya market rebounded on Monday when it rose above its 10- and 50-day moving averages, triggering buy-stop orders.
Corn remained weak throughout the session but the lock-limit months began trading late. Traders saw the electronic pool of corn offers shrink, which sparked buying in corn and soyabeans.
"It's a technical breakdown in corn and a breakout in soyabeans," said one CBOT corn broker. Expectations of fewer soyabean plantings and a delayed soya harvest in South America due to rain helped the soyabean market rebound.
May soyabean futures settled 17-3/4 cents higher at $7.79 per bushel, above its 10-day MA of $7.65-3/4 and 50-day of $7.59-3/4. New-crop November soya closed at $8.21-1/4, up 16-1/4 cents.
CBOT may corn closed 19-3/4 cents lower at $3.54-3/4 per bushel and new-crop December ended 14 cents weaker at $3.69-1/2. That's quite a contrast from this year when corn gained on soyabeans amid outlooks for corn demand to surge to meet the needs of ethanol producers.
The spot corn market reached a 10-year top of $4.37-1/4 per bushel this winter. Since USDA released its US planting forecasts on Friday corn acreage at 90.454 million, which is the most land seeded to corn since 1944, and soyabean acres down 8.4 million from 2006 the December corn: November soya price ratio has widened to 2.2 from 2.03.
As the price corn/soya price relationship widens, it could trigger farmers to switch intended corn plantings back to soyabeans. The products ended firm, taking their cue from soyabeans. A hike in crude oil prices provided an extra boost to soyabean oil. May soyameal ended $6.50 per ton higher at $218.30, with the deferreds up $4 to $7. Soyaoil settled 0.15 to 0.45 cent per lb firmer, with May up 0.28 at 32.76.
Volume was huge across the complex. In soyabeans, an estimated 204,253 futures and 37,869 options traded. If realised, soya futures trade would be an all-time high. Estimated soyameal trade was 54,164 futures and 1,898 options. Soyaoil trade was pegged at 41,115 futures and 5,181 options. Commodity funds bought 5,000-7,000 soyabean futures, 2,000 soyameal and 3,000 soyaoil, traders said.
Weekly export inspection data from last week were near expectations, down from previous weeks, as exporters turn to Brazil for cheaper supplies. USDA reported that 18.6 million bushels of soyabeans were inspected for export last week, compared with the previous week's tally of 19.6 million.
Traders expected USDA to report soya export inspections at 15 million to 18 million bushels. US Midwest spot basis bids for soyabeans were steady late on Monday even though country sales picked up as the CBOT market rallied, cash dealers said.
Trade data issued by the Commodity Futures Trading Commission late on Friday showed that large speculators expanded their net longs in CBOT soyabean and soyaoil futures/options in the week ended March 27. In soyameal futures/options, managed funds cut their longs.