By Joanna Newman
SOYA oil prices have soared to a two-month high, pulling up soya bean prices in their wake.
Bullish factors triggering the oil rally include rumours that India may buy from the USA instead of South America.
Strengthening prices in other oils, vegoil production cutbacks in south-east Asia and news of buying interest from China have also supported the market.
Spurred by these reports, the Chicago May soya oil futures contract has climbed to 20.1¢/lb (27.5p/kg) by yesterday (Wednesday), up from 18.0¢ at the start of April.
Encouraged by the strength in soya oil prices, the Chicago May bean contract is also up at 493.8¢/bushel yesterday (Wednesday). This compares with 485.3¢ a week ago.
US soya bean traders are trying to shrug off the burden of record high domestic bean stocks (a 1997/98 carryout of 200 million bushels, climbing to 430 million this year) and the prospect of even larger acreage to be planted this spring.
The South American crop will soon be hitting the export market and this overhang is causing concerns in the northern hemisphere.
However, in recent days adverse harvesting weather in Argentina has lent support to both soya bean and soya oil prices in the USA.
There are also reports of loading delays in Brazil which could benefit the USA in the world export market.