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  • Oct 27th, 2005
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Soyabean futures at the Chicago Board of Trade closed firm on Tuesday amid strength in the energy markets and inflation worries as investors turned to commodities as an inflationary hedge, traders said.

November soybeans settled 3 cents higher at $5.78 per bushel, with the deferreds 2-1/2 to 4 cents firmer.

December soyoil closed 0.02 cent up at 23.78 cents per lb, while the back months were 0.10 higher to 0.01 lower. Soyoil rebound from midday weakness when crude oil rallied more than $2 a barrel.

The Reuters/Jefferies CRB Index f 19 commodity futures unofficially closed 2.45 percent higher at 329.22 on Tuesday as several of the commodity markets reacted to inflationary worries, traders said.

The day's moves in soybeans were more technical than fundamental due to a lack of fresh news, traders said.

"We've tried to fill the gap up above $5.82-1/2 and couldn't quite fill it," said analyst Dan Cekander with Fimat Futures, referring to a 7-cent climb in November to $5.82.

"You bounced yesterday in the beans on a perfect technical fill in the gap and we're just following through," he added.

The November contract dipped to $5.66-1/2 on Monday, then rebounded from that level.

The US Agriculture Department late on Monday said 87 percent of the US soybean crop was harvested, ahead of trader estimates for 85 percent. Harvest was also ahead of the five-pace of 79 percent.

"The progress report was where we thought it would be. The last 10 to 15 percent takes a little longer to get out, but there isn't any real concern," said one CBOT cash-connected trader.

In the background, some slowdowns in the planting of Argentine and Brazilian soybeans was being monitored.

"But it's early in the season," the trader said.

Outlooks for a near-record US soybean harvest and a lagging export pace from a year ago continue to cast a bearish tone.

Exports are off from last year despite steady Chinese interest in US soybeans as prices dip, traders said. There was talk of fresh demand from China this week, but no deals were confirmed.

Midwest cash basis bids for soybeans were firm early Tuesday due to a lack of farmer sales and some slowdowns in harvest after recent rains.

But skies were expected to be clear this week, which should help farmers return to harvesting the last of their soybean and corn fields, said Meteorlogix weather service.

CBOT soymeal futures closed steady to $1 per ton higher on a technical rebound after sliding below $170 this week. December soymeal was up $1 at $170.90 per ton.

Meal has been under pressure due to ample supplies of US soymeal. Attractive crush margins enticed processors to crush newly harvested soybeans. Also bearish were worries about soymeal demand for feed due to spread of the deadly bird flu.

The CBOT November-December crush closed 0.58 cent lower at 59.56 cents per bushel.

Malaysian palm oil futures closed firm overnight on speculation that rival Chicago soyoil prices would rise, said traders in Kuala Lumpur.

CBOT soyoil remains underpinned by prospects for increased soy-based biodiesel demand.

Commodity funds bought about 1,500 soybean contracts, 500 soymeal and were even in soyoil. Commercials were net buyers in soybeans and bought about 1,500 soyoil contracts.

Firms continued to roll their November positions before the start of the delivery period on October 31. Fimat Futures spread 2,500 November/January.

Copyright Reuters, 2005


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