Prospects for increased soybean oil demand due to the biodiesel boom along with a rally in gasoline and crude oil prices on supply worries sent Chicago Board of Trade soybean and soyoil markets to multi-year highs this week.
    Given the rally some traders expected soy prices to set back a little early next week, especially after trade data from the Commodity Futures Trading Commission confirmed that commodity funds expanded their net long positions in both.
    “The market had a little bit of stall out. We’re going to have to watch that next week,” Don Roose, analyst with U.S. Commodities, said of beans and oil. “You could see a break if we get rain in the eastern Corn Belt.”
    Rain in the Midwest could keep farmers from wrapping up corn planting, which could cause some intended corn acres to be switched over to soybeans, which have a shorter growing season than corn.
    CBOT traders are also watching the CBOT July/September corn spread, an old-crop/new-crop bet that turned volatile this week. July corn is now trading at a 2-cent premium to September — spooking many to exit their July positions. The strength in the July/Sept spread coincided with strong cash markets.
    Ethanol manufacturers, feedlots, processors and other end-users are fighting for corn, having problems originating supplies as farmers have stopped selling with the focus on planting.
    “Because of that, it is sucking corn away from the river and making the Gulf hard to originate too” for export obligations, Roy Huckabay, analyst with The Linn Group, said of barge loading elevators on the Illinois and Mississippi rivers.
    All that said, weather will continue to be a prime daily mover for the markets. Traders are turning their focus to growing conditions and less on planting progress. But parts of the western Corn Belt are still well behind on seedings due to all the rain they’ve had this spring.
    On the wheat front, traders were watching world weather: welcome rains fell in Australia this week but dryness in China is still a worry, with outlooks for tight world stocks into next year. Talks with India this week have renewed hopes for U.S. wheat sales this year but there’s also the coming U.S. hard red winter wheat harvest next month, which tends to be a seasonal downer for prices.