Soybean oil futures prices surged mightily Tuesday on the Chicago Board of Trade in a late rally apparently incited by technical market analyses that signaled buying opportunities despite a serious oversupply.
Other grain and soybean futures also advanced while precious metals, energy, livestock and meat futures were mixed.
Soybean oil settled 20 cents to 57 cents higher, with the contract for delivery in March at $23.20 for 100 pounds.
The run-up in the last 20 minutes of trading surprised analysts who had been watching the soybean and soybean meal markets lead the grain markets higher for most of the day.
Soybean oil had opened lower in reaction to the morning’s posting of a higher-than-expected number of notices of intent to deliver soybean oil against the March contract. That initially was seen as bearish, but prices didn’t fall so many traders took it as a signal to purchase soybean oil instead.
“Later in the session, some buying began to accumulate and that fed on itself and we had a big surge in the end,” said Walter Spilka, a market analyst in New York with Smith Barney, Harris Upham & Co. “The market put on one of its best performances since the summer.”
Improved Technical Signals
The rally came despite what analysts call overwhelmingly negative supply-demand fundamentals for soybean oil, with stockpiles up and demand relatively sluggish.
“It’s extremely overpriced on world markets,” said analyst Cathy Leow of Thomson McKinnon Securities Inc. in New York.
But analysts agreed that the technical signals generated by mathematical analysis of the market’s recent price movements have improved and may have sparked the rally.
Soybean and soybean meal futures settled mostly higher, paced by gains in prices of soybeans to come from this summer’s crop.
Wheat and corn futures were supported by an improving export picture, including the Agriculture Department’s offer late Monday to subsidize sales of 2 million metric tons of wheat to China.
The USDA said after Tuesday’s close that it hoped Iraq would purchase 1 million metric tons of U.S. wheat at subsidized prices.
Wheat settled unchanged to 3.75 cents higher, with the contract for delivery in March at $4.3625 a bushel; corn was 1 cent to 2.50 cents higher, with March at $2.725 a bushel; oats were 4 cents to 5.50 cents higher, with March at $2.0475 a bushel, and soybeans were 5.25 cents to 10.50 cents higher, with March at $7.625 a bushel.
Gold futures inched higher and silver declined slightly in lackluster trading on New York’s Commodity Exchange.
Gold settled 20 cents to 60 cents higher, with April at $390.40 an ounce; silver was 2.1 cents to 3.9 cents lower, with March at $5.824 cents an ounce.
Crude oil futures gained marginally but refined products ended mixed on the New York Mercantile Exchange.
West Texas Intermediate crude oil settled 1 cent to 9 cents higher, with April at $18.15 a barrel; heating oil was 0.20 cent lower to 0.12 cent higher, with March at 52.45 cents a gallon, and unleaded gasoline was 0.47 cent lower to 0.14 cent higher, with March at 50.81 cents a gallon.
Cattle futures settled mostly higher on the Chicago Mercantile Exchange, although near-month contracts for both live and feeder cattle declined on speculative profit taking. Pork futures were narrowly mixed.
Live cattle were 0.10 cent lower to 0.30 cent higher, with April at 78.05 cents a pound; feeder cattle were 0.12 cent lower to 0.33 cent higher, with March at 82.80 cents a pound; live hogs were 0.08 cent lower to 0.30 cent higher, with April at 43.72 cents a pound, and frozen pork bellies were 0.07 cent lower to 0.50 cent higher, with March at 38.32 cents a pound.