High crude oil prices are prompting more soyoil to be bought… with the idea that soyoil would be turned into an alternative to all that foreign oil: domestically made biodiesel.
This Dow Jones Newswires story posted on the Missouri Ruralist web site breaks down the rise and what caused it:
November soybeans settled 10 1/4 cents higher at $9.87 and January soybeans ended 10 1/2 cents higher at $10.05 3/4. December soymeal settled $2.30 higher at $281.20. December soyoil finished 53 points higher at 40.06 cents a pound.
Sharply higher crude oil futures attracted speculative buyers in soyoil, which spilled over into soybeans, and when wet conditions causing harvest delays in the western Midwest were added, futures were firmly underpinned, said Brian Hoops, president of Midwest Market Solutions in Yankton, S.D.
Soy product futures ended higher, with soyoil the upside leader of the complex. Soyoil rallied, buoyed by spillover strength from sharply higher crude oil futures. The momentum from crude oil attracted speculative buyers, with optimistic outlooks for biodiesel encouraging speculative interest as well, analysts said.