CHICAGO (Dow Jones) -- U.S. soybean futures ended higher Friday, settling well off early lows, as prices bounced on Argentine weather concerns.
The Chicago Board of Trade January soybean future ended 9 3/4 cents or 0.8% higher at $12.98 3/4 a bushel, and the March futures, the most active contract settled up 10 cents or 0.8% at $13.10 1/2.
The market is still pretty worried about Argentine weather, with forecasts for a return of hot, dry conditions following weekend rain enticing traders into adding some risk premium to prices, said Jack Scoville, vice president Price Futures Group.
Argentina soy crops still have opportunities to improve, but at this point
they don't need any more heat and stress, Scoville added.
Brazil and Argentina are the world's second and third largest producers of soybeans behind the U.S. It is a necessity for South America to raise large crops this year to meet growing world demand, and the slightest indication they will not causes futures buying as a result.
Traders taking profits on short positions established Thursday or simply
reducing risk exposure in the market added to the declines, as activity
seasonally declines during the holidays.
Friday completed the last full trading week of the year, with CBOT markets closed next Friday for the Christmas holiday and will trade an abbreviated session on New Years Eve Friday, Dec. 31.
Deferred month contracts produced the largest gains, as private acreage estimates for 2011's U.S. soy crop reignited talk of an acreage battle developing, Scoville said.
Soybeans compete with other crops, including corn and cotton, for farmland, with all the markets trying to increase prices to encourage plantings. The soy contract for Nov 2011 delivery rose 16 3/4 cents to $12.29 3/4 a bushel.
Private analytical firm Informa Economics on Friday raised its estimate for 2011 soybean plantings. Informa estimated soybean plantings at 77.565 million acres, up from its November estimate of 75.8 million, traders said. The USDA estimates 2010 soybean plantings at 77.7 million acres.
SOY PRODUCTS
Soy product futures ended higher, with soymeal taking a leadership role in the advances. The strength in soymeal prices was a pure weather play, as cold, icy conditions force feeders to increase protein intact in livestock ward off freezing temperatures, said Jack Scoville analyst with Price Futures Group. Livestock generate internal warmth by eating increased amounts of corn and soymeal, Scoville said.
Soyoil edged higher on outlooks for increased usage for biodiesel, but
advances were limited by traders taking profits on long soyoil/short soymeal spreads, analysts said. CBOT January soyoil ended 0.06 cents or 0.1% higher at 54.13 cents per pound, and January soymeal traded $4.00 or 1.2% higher at $347.80 a short ton. Jan oil share was 43.79%, while the Jan soybean crush margin ended at 61 3/4 cents.
