January 12, 2007

 

CBOT Soy Review on Thursday: Rallies on speculative buys amid corn influence

 

 

Chicago Board of Trade soybean futures ended Thursday's session posting solid gains, underpinned by speculative buying amid spillover momentum from a surge to limit up levels in neighboring corn futures.

 

January soybeans finished 10 1/4 cents higher at US$6.64, and March soybeans ended 9 1/2 cents higher at US$6.74 1/4. March soymeal settled US$2.70 higher at US$194.40 per short tonne, while March soyoil ended 32 points higher at 28.36 cents a pound.

 

The market staged a recovery after a significant correction over the past week, with the magnitude of the upward move related to sharp advances in corn and wheat, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Decent demand showing up over the course of the week coupled with ideas recent selling interest was showing signs of exhaustion gave support to aid the higher tonnee, analysts say.

 

Futures bolted to double-digit gains, with traders saying the market was overdue for a bounce ahead of Friday's crop reports, following a significant price correction over the past week, added Scoville.

 

Nevertheless, the market was at the mercy of corn, as futures remained linked amid perceptions soybeans will have to maintain a favorable price ratio into the spring to attract adequate 2007 acreage, a CBOT floor analyst said.

 

Technically motivated buying aided the price bounce, with nearby futures filling chart gaps and positioning ahead of Friday's crop reports generating short covering interest to keep prices firmly underpinned, traders added.

 

On tap for Friday, U.S. Department of Agriculture will release its updated production, quarterly grain stocks and supply and demand tables. The average of analysts' estimates anticipates U.S. soybean production for the 2006-07 marketing year at 3.235 billion bushels versus 3.204 billion in the USDA's November report. The average of analysts' estimates pegs the Dec. 1 stock figure at 2.736 billion bushels, and the average of analysts' estimates peg soybean-ending stocks at 586 million bushels, up 21 million from December's forecast.

 

USDA announced private exporters reported the sales of 180,000 metric tonnes of soybeans to China for delivery during the 2006/2007 marketing year.

 

In pit trades, ADM Investor Services bought 1,000 March, Term Commodities and Man Financial each bought 400 March, with FCStonnee buying 300 March. Fortis sold 1,000 March, with Calyon Financial and man Financial each selling 300 March.

 

 

SOY PRODUCTS

 

 

Soy product futures ended higher across the board, rallying in unison with soybeans. Upside momentum filtered through the complex throughout the day, with speculative led buying a key attraction. In soyoil, technical influences were featured as nearby contracts filled chart gaps left from earlier in the week, analysts said. The market managed to rebound from prior setbacks in step with soybeans, traders said.

 

Soymeal futures bounced higher, finding speculative support in a bid to rebound from prior losses, traders said. Supportive weekly export sales and ideas livestock soymeal demand may pick up amid the upcoming snowstorm provided underlying strength, a floor analyst added.

 

March oil share ended at 42.18% and the March crush ended at 65 1/2 cents.

 

In soymeal trades, buyers and sellers were widely scattered among various commission houses.

 

In soyoil trades, Speculative fund buying was estimated at 2,000 contracts. JP Morgan bought 600 March, Bunge Chicago bought 400 March, Citigroup bought 400 May. Rand Financial sold 500 March and 300 July, JP Morgan sold 300 March.