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CBOT soyabeans end higher as funds lift soyaoil

CHICAGO: Soyabean futures at the Chicago Board of Trade ended higher on Friday on spillover strength from soyaoil which was fuelled higher by commodity funds.

CBOT soyabeans settled 1-1/2 to 3-3/4 cents per bushel higher, with May up 2-1/2 at $5.13, its highest close since hitting $5.22-1/2 on Feb. 22.

"Late profit taking pared gains, but soyabeans still finished higher," said Vic Lespinasse, floor commentator for AG Edwards & Co. "Funds were buying oil and this helped beans."

Funds bought 5,000 soyaoil contracts and 500 of soyabeans.

Traders said soyabeans were also supported by follow-through shortcovering from Thursday when funds sparked a late rally.

They said soyaoil was also supported by shortcovering amid signs that the depressed market might have bottomed out. Soyaoil futures started the week near contract lows.

Analyst Bob Lekberg of Goldenberg Hehmeyer said soyabeans were also underpinned by the lack of farmer selling in the cash markets as they waited for values to improve.

He said the market however remained under a cloud amid the improving crop weather in the United States and South America.

Attempts by the market to rally have been checked by recently improved crop weather in the U.S. Midwest and in South America, especially in the drier areas of southern Brazil.

Weather Services Corp. reported early Friday that a pattern of wetter weather, including the previously dry areas of the northwest, makes soil moisture favourable as the planting season approaches in the U.S. Midwest. This is a better outlook for the planting as long as dryness does not return, WSC said.

WSC said it would be dry Sunday in the Midwest with a chance of a few light showers developing from west to east Monday and Tuesday and a more important storm possible for the middle of next week.

Brazilian meteorologists Somar on Friday said Brazil's key southern soyabean states were likely to stay hot and dry early next week after seeing lingering weekend rains.

In a daily report, Somar forecast light rains for Brazil's first and third largest soyabean states, Parana and Rio Grande do Sul, respectively, with only afternoon showers expected for number two producer Mato Grosso.

Heavy rains had been forecast for those three states on Thursday, but Somar said the precipitation had failed to appear and rainfall totalled just 1 to 3 millimetres in producing regions. -Reuters