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CBOT soyameal reaches 18-month high, soyaoil climbs

CHICAGO: Soyameal futures climbed to another 18-month high on Monday, as South America weather nervousness and bullish technical patterns kept the soya complex moving higher. Soyaoil also ended higher.

Soyameal settled $1.80 to $2.40 per ton higher, with March up $1.80 at $164.10, the highest close for a spot CBOT meal contract since $190.80 on July 22, 1998. Contract highs were set in most traded positions, with March reaching $166.

Soyaoil futures settled 0.25 to 0.27 cent per lb higher, with March up 0.27 at 16.45 cents.

Concerns that persistent dryness in parts of South America's soyabean belt would harm soyabean acreage continued to propel prices higher on Monday, with CBOT soyabeans ending at the highest levels in more than three months.

Traders said weekend rain amounts in the drier areas of South America were disappointing, while forecasts held only limited rainfall potential. Weather Services Corp. said widely scattered showers of 1/4 to 1 inch fell in the major soyabean areas of Rio Grande do Sul over the weekend, while conditions were mostly dry in Parana and southern Mato Grosso.

Analysts have already scaled back their expectations for South America's soyabean crop this year, with many projecting a Brazilian output of 29 million to 30 million tonnes, compared with the U.S. Agriculture Department's current forecast of 31 million.

Smaller soyabean production in South America would reduce the availability of meal and soyaoil.

Soyameal futures also rose on stronger technical patterns, traders said, with commodity funds again prominent buyers. Funds were estimated to have bought at least 1,000 meal contracts on the day, as well as 1,000 soyaoil contracts.

"The bean complex continues to be our bull leader, with very positive weekly closes on the long-term meal and bean charts," a report from Chicago trading firm The Linn Group said Monday.

"We've cleared the $160.00 to $162.00 daily and weekly hurdle," the report continued, referring to March meal contracts. "Meal should roll right up to counts at $167.70 on March before we see a meaningful break."

The Linn Group said it expected short-term selling if March reached the $168 to $170 range, and placed support at $160.

-Reuters