20000114

CBOT meal hits 2-mth high as soya gains, soyaoil up

CHICAGO: Soyameal futures at the Chicago Board of Trade climbed to the highest levels in more than two months on Wednesday, as surging corn and soyabeans and a reduced supply outlook pulled product markets higher.

Soyameal settled $2.10 to $3.80 per ton higher, with March contracts up $2.20 at $152.50, the contract's highest close since Nov. 5.

Soyaoil settled unchanged to 0.15 cent per lb higher, with March up 0.15 at 15.93 cents.

Traders said meal largely followed corn and soyabeans, which rose sharply in response to lower than expected US Department of Agriculture reports on stocks and crop production.

The USDA lowered its previous estimate for 1999 US soyabean production by 30 million bushels to 2.643 billion, about 23 million bushels below trade expectations and down from 1998's record 2.741 billion bushel crop.

Projected soyabean stocks at the end of the current 1999/2000 marketing year were subsequently dropped 30 million bushels to 365 million, implying reduced availability of meal and soyaoil as well. Ending soyabean stocks were 348 million for 1998/99.

The numbers prompted heavy commodity fund buying in meal and corn, traders said, with buying accelerating as the markets moved above some key chart levels. Funds were estimated to have bought about 18,000 corn contracts and 6,000 meal contracts up to late trading, traders said. Much of the fund buying in meal was believed to be the establishment of new long positions.

Corn and meal are both components in livestock feed, and prices of both often move in the same direction.

"There has been good fund buying (in meal)," said Mark Weidner, grain and oilseed analyst for Cargill Investor Services in Chicago. "It's new longs. It's following the corn as a feed ingredient and also following the beans."

Other bullishly viewed data stemmed from the USDA's quarterly stocks report. The USDA said US soyabean stocks as of Dec. 1 totalled 2.182 billion bushels, down from 2.186 billion a year earlier and below expectations of roughly 2.209 billion.

Soyaoil lagged meal and soyabeans, partly due to a reduction in the US export outlook. The USDA trimmed projected US soyaoil exports for 1999/2000 to 1.75 billion lbs from a previous estimate of 1.8 billion, and also lowered meal exports to 7.1 million tons from 7.4 million.

Up to the last 45 minutes of trading, FIMAT Futures Inc. bought 1,500 March meal contracts and 500 May, Cargill Investor Services bought 600 March and 1,000 May and Salomon Smith Barney Inc. bought 500 March and 500 May, pit sources said.

In soyaoil, Produce Grain bought 700 March and ABN AMRO Inc. bought 500 March.

Soyameal volume during Wednesday's pit session was estimated by the CBOT at 30,000 contracts. Soyaoil volume was estimated at 17,000 contracts.-Reuters