Markets

Soybeans jump 2pc on euro zone optimism

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Corn climbed over 1 percent, breaking through a key chart resistance level at the 200-day moving average and touching off buy-stops, while wheat rallied 2 percent.

Corn and wheat rose the most in a week.

Soy also may have found support from a strike by Argentina's soy-processing workers that almost halted crushing activity around the main grains hub of Rosario and disrupted loading of export soy.

Argentina is the worlds third largest soybean exporter and the largest exporter of soymeal and soyoil.

"There is optimism out of Europe. It now looks like the Greek government will remain intact, so I think that is giving everything a boost," said Dan Cekander, analyst for Newedge USA.

The euro zone optimism spread to a broad spectrum of commodities and equities while the dollar sagged on hopes Greece will abandon plans to hold a referendum over a euro-zone bailout.

Investors also took solace as Greek Prime Minister George Papandreou said Greek membership in the euro zone was not in question and that opposition support for a bailout package was "great."

Markets had been under pressure and investors had been reluctant to buy commodities or stocks because of concerns that the euro zone bailout deal for Greece was unraveling.

CBOT January soybeans were up 24-1/2 cents per bushel at $12.27-1/4 per bushel, December corn was up 8-1/2 cents at $6.53-1/2, and December wheat was up 12-1/2 at $6.36.

Cekander and other analysts also said the soybean market found support from short-covering since the market had been technically oversold and vulnerable to a snap back rebound.

And there were export rumors along with firm cash soybean markets, slow farmer selling and wet weather in the US that is slowing the final soybean harvest.

"There are rumors that a few cargoes of beans were sold to China and soybean receipts have been cancelled," Cekander said.

China is the world's largest soybean importer and there is talk China bought from 2 to 4 cargoes of US soybeans this week.

Soybean receipts or deliveries on the new-crop November CBOT soybean futures contract had been large until Thursday and the deliveries had been accepted or stopped by commercial firms, a sign of strong demand for cash soybeans.

Deliveries on the first day they were permitted early this week totaled over 700 contracts and only nine contracts were issued for delivery on Thursday.

Position-squaring was beginning to surface ahead of the US Department of Agriculture's November crop production report on Wednesday.

"There's a lot of uncertainty about the report next week, there's always the possibility for a surprise," said Anne Frick, oilseeds analyst for Jefferies Bache.

Copyright Reuters, 2011