January 26, 2008

 

CBOT Soy Review on Friday: End up; extends recovery on speculative buys

 

 

Chicago Board of Trade soybean futures ended higher Friday, extending the market's recovery bounce from prior losses on speculative buying.

 

March soybeans ended 12 1/2 cents higher at US$12.43, July soybeans finished 11 1/2 cents higher at US$12.75 1/4 and November soybeans ended 17 cents higher at US$12.32. March soymeal settled US$2.80 higher at US$335.00 per short tonne. March soyoil finished 33 points higher at 52.01 cents per pound.

 

Follow through buying from Thursday's sharp gains led prices higher, with early strength in outside markets aiding the recovery force of futures, analysts said.

 

Solid underlying demand, technical support beneath the market and the easing of recession fears served as the catalysts to attract speculative buying, with traders covering some shorts heading into the weekend, analysts added.

 

However, overall activity was subdued, as traders continued to maintain a cautious approach, with prices briefly sliding into negative territory after midday in conjunction with a drop in outside equity markets as well as the trimming of gains in crude oil and metal futures, a CBOT floor analyst said.

 

Nevertheless, futures managed to regain their footing down the stretch, feeding off technical strength, bullish long-range fundamentals and ideas the week's volatile moves have dropped futures to levels of value, he added.

 

Meanwhile, U.S. Department of Agriculture reported weekly soybean export sales were 687,300 metric tonnes for the week ended Jan. 17. 2007-08 marketing year sales totaled 663,000 tonnes. The sales were primarily for China with 204,300 metric tonnes, Mexico with 111,600 tonnes, and Japan with 74,400 tonnes. Analysts had forecast sales between 600,000 and 900,000 metric tonnes.

 

Soyoil commitments were 58,800 metric tonnes, above trade estimates of 10,000 to 20,000 tonnes. The sales were primarily to China with 30,000 tonnes. Soymeal sales were a net 163,000 tonnes, above trade estimates of 75,000 to 125,000 tonnes.

 

The DTN Meteorlogix weather forecast said in central Argentina crop areas, scattered showers and cooler temperatures will help to ease stress to crops over the western growing belt. However, more rain will be needed to end stress. The outlook for next week is not quite as dry or as hot as in Thursday's presentation, Meteorlogix said. However, the general trend will still be drier and warmer than normal. This means stress to crops will likely continue.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, continuing to rebound from early week declines. Soymeal futures climbed on technically inspired buying, with solid underlying demand a supportive feature aide the recovery power of the market following the volatility of the past week, analysts said.

 

Soyoil futures ended higher, extending its bounce from prior lows on carryover momentum from Thursday, technical support and bullish underlying demand with weekly export sales well above expectations, analysts said. The supportive influence of higher outside inflationary markets helped traders gain confidence to extend the market's bounce from previous lows, a CBOT floor trader added.

 

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

 

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