Soybean futures at the Chicago Board of Trade rose on Tuesday on spill-over strength from the wheat rally, traders said. Worries about a high pressure ridge moving into the US Midwest next week, creating drier crop growing conditions gave the market an early boost.
But those fears eased as radar maps showed parts of Illinois receiving good rains on Tuesday, traders said. July soybeans closed 2-3/4 cents higher at $8.07 per bushel but off its high of $8.11-3/4. The deferreds ended 2-1/2 to 10 cents up.
The nearby Chicago wheat contracts closed about 20 cents higher after several nearly touched the 30-cent trading limit in response to a report showing Canadian farmers slashed their wheat seedings this spring.
"The strength there is too great to ignore. It's the whole cycle again now for the competition for acres," Mario Balletto, analyst for Citigroup, said. "Wheat is getting tight and the price is going up. Beans can't afford to lose any more acres so they have to remain competitive," he added.
Soymeal took its cue from the strength in CBOT soybeans and grains while soyoil ended lower hovering near some technical selling levels, slipping below its 10-day moving average.
July soymeal ended steady at $220.10 per ton, with the back months up 10 cents to $1.50. July soybean oil closed 0.10 cent lower at 34.98 cents per lb - after breaking through and then slipping below its 10-day moving average of 35.28 cents. The deferreds ended 0.25 cent weaker to up 0.05 cent.
Commodity funds bought 3,000 soybean contracts, 1,000 soymeal and sold 1,000 soyoil, trader said. Outlooks for US soy acreage and stocks to shrink in the years ahead as farmers plant more corn and fewer soybeans remains a supportive feature. But analysts, on average, expect USDA to show a slight upward revision in its soybean acreage estimate from its March forecast. The government issues its new acreage numbers on Friday.
Additionally, Statistics Canada reported Tuesday that Canadian farmers planted a record 14.586 million acres of canola this spring, up 17.4 percent from last year.
USDA said late Monday that 63 percent of the soybean crop was in good to excellent condition, up 1 point from the week before. There was a big improvement in the Illinois soy crop, with 65 percent good to excellent - up from 52 percent in those categories the week before. In export news, USDA confirmed that China bought 120,000 tonnes of soybeans for delivery during 2007/08. Spot basis bids for soybeans remained weak at Midwest locations on Tuesday after recent farmer sales and limited export demand, cash dealers said.