January 31, 2008

 

CBOT Soy Review on Wednesday: Closes higher amid demand, spreading

 

 

Chicago Board of Trade soybean futures ended higher Wednesday amid solid commercial demand and active spreading, analysts said.

 

March soybeans closed 9 cents higher at US$12.75 3/4 per bushel, and May soybeans climbed 8 1/2 cents to US$12.94. March soymeal jumped US$3.10 to US$342.70 per short tonne, and March soyoil rose 4 points to 53.46 cents per pound.

 

CBOT soybeans saw commercial buying begin Tuesday and continue Wednesday, said Brian Hoops, president of Midwest Market Solutions. Weekly U.S. soybean export sales, due out Thursday from the U.S. Department of Agriculture, are expected to be 500,000 to 800,000 tonnes.

 

Spreading was another feature of the session, with some traders buying the front months and selling deferred contracts, a CBOT floor trader said. Commodity funds bought an estimated 2,000 contracts.

 

There was not much fresh news out for the markets to feed on, Hoops said. South America has seen decent rains, and there are some concerns that more moisture could delay early harvest activities in some areas of Brazil, an analyst said.

 

In Brazil, the next seven days should bring daily episodes of scattered showers and thunderstorms to northern Mato Grosso, DTN Meteorlogix said. Rainfall totals during the next three days will range from .30-1.5 inches, with locally heavier totals, the private weather firm said.

 

"We've had plenty of rains in Mato Grosso," said Jerry Gidel, analyst for North America Risk Management Services.

 

In Rio Grande do Sul and Parana in Brazil, scattered light showers were on tap Wednesday, with locally heavier totals, Meteorlogix said. Dry conditions or just a few light showers were expected Thursday, the firm said.

 

There are "generally favorable conditions for the developing crop throughout the major growing areas of Brazil although wet weather in the Mato Grosso bears watching for soybean rust and early harvest delays," Meteorlogix said. Major growing areas of central Argentina should see some beneficial rain, although more is needed, the firm said.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended mostly higher, with soybeans in a rebound from early weakness, a floor trader said.

 

Commodity funds bought an estimated 1,000 soymeal contracts. In soymeal pit trades, Fortis bought 200 March and MF Global sold 200 March.

 

In soyoil trades, RJ O'Brien bought 200 March, while Iowa Grain and ADM each sold 200 March. Citigroup sold 200 July soyoil and 100 May soyoil.

 

Weekly export sales for the week ended Jan. 24 are expected to be 75,000 to 150,000 tonnes for soymeal and 10,000 to 60,000 tonnes for soyoil, analysts said. For the week ended Jan. 17, soymeal export sales were 163,000 tonnes and soyoil export sales were 58,800 tonnes, according to the USDA.