January 30, 2008

 

CBOT Soy Review on Tuesday: Mixed; nearbys extend recovery from lows

 

 

Chicago Board of Trade soybean futures ended mixed Tuesday, with nearby contracts rising for the fourth consecutive day, continuing their recovery from lows, analysts said.

 

March soybeans ended 13 cents higher at US$12.66 3/4, July soybeans finished 13 1/4 cents higher at US$12.85 1/2 and November soybeans ended 6 cents lower at US$12.22 3/4. March soymeal settled US$3.00 higher at US$339.60 per short tonne. March soyoil finished 87 points higher at 53.42 cents per pound.

 

"We are seeing a mature market, as it wants to work its way back up after trimming the fat of heavy longs on its previous run to near term lows, settling into a consolidative mode," said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The market is seemingly in a lull of fresh fundamental news, with the major crop report behind, the heart of the South American harvest and U.S. plantings still weeks away, keeping the market focused on outside influences, analysts added.

 

Spillover support from sharp gains in wheat futures, higher crude oil futures and firmer equity markets provided confidence for buyers to extend the current uptrend in nearby futures, traders said. Talk of some early harvest slowdowns in Brazil aided nearby price strength as well.

 

Meanwhile, bull spreading helped lower new crop prices, with consolidative action following previous volatile price action weighing on the back months as well, traders added.

 

On the technical side, March futures rose to their 50% retracement level between the last swing high of US$13.41 and last swing low of US$11.89 1/2, thus forming a pennant and possible intermediate swing high, a CBOT technical trader said.

 

The DTN Meteorlogix weather forecast said conditions are generally favorable for crops in major crop areas of South America this week. At this time there are no major concerns in Brazil. In Argentina, scattered showers and cooler temperatures during the past week or so have helped ease stress to crops.

 

Nevertheless, excessive rainfall in Brazil's Mato Grosso state could result in delays of new soy deliveries to soy crushing facilities and crop losses, analysts said Tuesday.

 

"We are getting a lot of rain, and farmers are having an impossible time harvesting in some parts of the state. If this keeps up, you could see some crop losses being declared in a week or so," Thiago Simon, a soy buyer at mid-sized soy crusher Sperafico Agroindustrial in Mato Grosso, told Dow Jones Newswires.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative funds net buyers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil futures surging higher for the fourth consecutive day. The combination of technically based buying, spillover support from crude oil, and underlying demand combined to extend upside momentum, analysts said.

 

Soymeal futures ended mixed, with nearby contracts higher on spillover from soybeans. Bull spreading allowed nearby contracts to gain on deferred months while oil/meal spreading kept a lid on advances meal as a whole, analysts added.

 

March oil share ended at 44.03% and the March crush ended at 68 cents.

 

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

 

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