January 4, 2008

 

CBOT Soy Review on Thursday: Sets new all-time highs on speculative buying

 

 

Chicago Board of Trade soybean futures ended higher Thursday; continuing its march to higher levels, with the July 2008 contract setting a new all-time high on the back of speculative led buying.

 

January soybeans settled 19 cents higher at US$12.51 1/2 and March soybeans ended 18 3/4 cents higher at US$12.67 1/2. March soymeal settled US$6.50 higher at US$350.60 per short tonne. March soyoil finished 38 points higher at 51.18 cents per pound.

 

CBOT July soybean futures set all-time highs in both pit and electronic trade Thursday. On the e-cbot electronic trading platform, July soybean futures reached US$12.93 per bushel. The July contract in open-outcry trading climbed to a new high of US$12.92 per bushel. The previous all-time high of US$12.90 had stood since June 5, 1973.

 

Speculative led buying served as the catalyst for the gains, with concerns over tightening supplies amid strong global demand a long range bullish feature, analysts said. Renewed fund buying interest to start the calendar year is keeping upward momentum in play, with broad based buying across commodities in general helping keep soybean prices upwardly mobile, analysts added.

 

"The market is showing the signs of a very strong bull market, with its ability to shake off early consolidative selling and rebound to new highs," said Vic Lespinesse, analyst with Illinois Grain in Chicago.

 

Lingering concerns surrounding dryness in parts of Argentina's soybean belt, outlooks for next week's crop report to show a tighter U.S. balance sheet and talk of speculative index funds infusing a fresh dose of capital into commodities served as the cornerstonnees for the market's rise to historic levels, analysts added.

 

The DTN Meteorlogix weather forecast said Argentina's central crop belt had some scattered thunderstorms Wednesday night in eastern Buenos Aires. Temperatures Wednesday were hot again. Readings Thursday were slightly cooler. Long-range charts suggest a chance for thunderstorms and cooler temperatures early next week. Overall, this is an improved outlook for rain in central Argentina looking into mid-January, Meteorlogix forecasts.

 

On tap for Friday, the USDA is scheduled to release weekly export sales figures for the week ended Dec. 27 at 8:30 a.m. EST. Trade estimates put soybean export sales at 300,000 to 500,000 metric tonnes. Soymeal sales are projected in a range of 50,000 to 100,000 metric tonnes, with soy oil sales expected in a range from 5,000 to 15,000 tonnes.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated near 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures rallied to new contract highs, energized by speculative led buying. Soymeal futures set new highs, climbing to their highest point since mid 2004, with broad based commodity buying, strong global feed demand and worries over tightening soybean stocks underpinning features, analysts said.

 

Soyoil futures rallied to new highs as well, with deferred month setting new all-time highs on a speculative led buying push, analysts said. Spillover support from an early push to new all-time highs in crude oil futures, weakness in the U.S. dollar and outlooks for fresh speculative capital to enter the market, buoying prices, analysts added.

 

March oil share ended at 42.19% and the March crush ended at 66 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.