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CBOT meal ends at 3-month high, soyaoil 6-week high

CHICAGO: Soyameal futures at the Chicago Board of Trade followed a continued rally in soyabeans and ended at the highest levels in over three months on Tuesday, as weather concerns surrounding South America's soyabean crop lifted the soya complex. Soyaoil ended near six-week highs.

Soyameal settled 90 cents to $2.80 per ton higher, with March up 90 cents at $159.40, the contract's highest close since hitting the same level on Oct. 13.

Soyaoil settled 0.02 cent per lb lower to 0.21 higher, with March up 0.21 at 16.53 cents, the contract's highest close since 16.65 on Dec. 8.

CBOT soyabeans bounced back from early declines and soared to the highest levels in nearly three months, gaining 6 cents a bushel or more in most contracts.

Soyabeans sank initially on news of widespread weekend rain in dry areas of Brazil, but traders said market focus quickly turned to an outlook for warmer, drier conditions later this week.

Salomon Smith Barney Inc. meteorologists said Tuesday that a heat-producing high pressure ridge was expected to intensify across southern Brazil during the next three to five days, pushing temperatures up as high as 100 degrees Fahrenheit.

Rio Grande do Sul, Brazil's third-leading soyabean growing state, has suffered from below-normal rainfall since the planting season began in October. The state's agriculture secretariat said Monday that Rio Grande do Sul has lost more than 7 percent of its soyabean crop and 18 percent of its corn due to the drought.

Brazil is the world's second-leading soyabean producing nation behind the United States. Any production shortfalls in Brazil's soyabean crop would subsequently reduce the availability of meal and soyaoil as well, traders noted. Argentina, the world's third-leading producer, has also suffered from dryness in some crop areas.

Despite the firmer close, soyaoil futures continued to lag the rest of the soya complex amid sluggish US soyaoil exports and abundant supplies globally of vegetable oils.

"Poor exports in oil are weighing on this market now," said Brian Scott, a trader with R.J. O'Brien & Associates, in a report Tuesday.

Declines overnight in Malaysian palm oil weighed on soyaoil early, traders said.

Palm oil fell in response to bearish production figures from private analyst Ivan Wong. Wong upwardly revised a previous estimate for December Malaysian palm oil production by 30,000 tonnes to 892,000 tonnes. He also raised his end-December stocks estimate to 1.17 million tonnes from 1.14 million previously.

Up to late trading, E.D. & F. Man International bought 600 March meal contracts, Iowa Grain bought 400 March and ABN AMRO Inc. sold 400 March, 800 May and 300 July, floor sources said.

In soyaoil, Produce Grain bought 400 March, Salomon Smith Barney Inc. sold 400 March and Merrill Lynch sold 200 May and 400 July.

Soyameal futures volume in Monday's pit session was estimated by the CBOT at 24,000 contracts, compared to 40,472 Friday.

Soyaoil futures volumed was estimated at 17,000, compared to 22,108 Friday.-Reuters