U.S. soybean futures rose for a third straight session Friday and neared psychological resistance at US$15 per bushel in reaction to November’s soybean crush being the largest in nearly three years.
Wheat and corn ended higher, stabilizing after falling for five and six straight sessions, respectively.
At the Chicago Board of Trade, January soybeans settled up 19-1/2 cents at $14.96 per bushel after reaching $14.97. The contract hit $14.98-1/4 a week ago but has not traded above $15 since Nov. 8 (all figures US$).
CBOT March corn rose 10-1/2 cents to $7.30-3/4 a bushel and March wheat settled up 5-1/2 cents at $8.14.
The National Oilseed Processors Association (NOPA) on Friday reported the November U.S. soybean crush at 157.3 million bushels, the largest monthly total in nearly three years.
Analysts attributed the robust crushing pace to high profit margins, fueled in part by the strongest demand for U.S. soybean meal — a high-protein feed ingredient — since the 2009-10 marketing season.
"The beans are helped out with the NOPA crush… You are confirming the idea that we are not rationing the demand," said Mike Zuzolo, president of Global Commodity Analytics at Lafayette, Indiana.
He said the NOPA crush figure underscored a report from the U.S. Department of Agriculture earlier this week that lowered the forecast for U.S. soybean inventories due to a strong soy crushing pace.
Export demand for soybeans has also been strong, especially from top global soy buyer China, which has forced domestic processors to bid up for soybean supplies.
CBOT soybeans drew additional support from news that manufacturing in China, the world’s second-largest economy, grew at its fastest pace in 14 months in December.
For the week, January soybeans were up 1.6 per cent.
Corn up on soy strength, technicals
Corn rose on spillover strength from soybeans and chart-based buying after the benchmark March corn contract on Thursday held above support at its mid-November low of $7.14-1/4.
"It was basically a big test of the lows in corn yesterday — a successful test, thus far," said Dan Cekander, analyst with Newedge USA in Chicago, adding that the market appeared to have factored in poor export demand for U.S. corn.
"We have traded a fair amount of bearishness on the export situation, and at some point the market is going to look past that and realize that the other demand categories can still tighten the U.S. corn balance sheet significantly — feed, corn grind for ethanol," Cekander said.
Despite Friday’s rally, CBOT March corn ended the week down 0.9 per cent.
Wheat halts skid
Wheat rallied after hitting a five-month low on continued technical selling following Tuesday’s USDA report, in which the government raised its forecasts for U.S. and global wheat ending stocks.
CBOT March wheat fell 5.5 per cent for the week, its largest weekly drop since June.
Ahead of Friday’s trade, the contract’s nine-day relative strength index (RSI) stood at 19, its lowest reading in more than a year. An RSI of 0 to 30 signals that a contract is oversold and may be due for a rebound, while a reading of 70 to 100 indicates it is overbought.
The fall in prices may help attract end-user buying.
Wheat market bulls also noted the Buenos Aires Grains Exchange on Thursday cut its estimate of Argentina’s 2012-13 wheat harvest to 9.8 million tonnes from 10.1 million due to excessively wet weather.
"(Wheat) prices started to consolidate," said Sudakshina Unnikrishnan, commodities analyst at Barclays Capital. "There is a lot of concern about the Argentine crop. That combined with higher demand due to lower prices led to a modest recovery."
– Julie Ingwersen covers the commodities markets for Reuters in Chicago. Additional reporting for Reuters by Ivana Sekularac in Amsterdam and Colin Packham in Sydney.