February 2, 2008

 

CBOT Soy Review on Friday: Climbs on speculative buying; soyoil new highs

 

 

Chicago Board of Trade soybean futures ended higher Friday, rising on speculative buying associated with fresh money entering the market and new highs in soyoil, analysts said.

 

March soybeans ended 12 3/4 cents higher at US$12.87 1/4, July soybeans finished 12 3/4 cents higher at US$13.20 and November soybeans ended 8 1/2 cents higher at US$12.54. March soymeal settled US$1.70 higher at US$343.20 per short tonne. March soyoil finished 40 points higher at 54.12 cents per pound.

 

Fund buying surfaced on the first day of the month, with reports of a new fund that carries a big basket of commodities providing fresh buying to underpin prices, said Dan Basse, president of AgResource Company in Chicago.

 

Analysts said futures were lifted to 2-week highs with added support from spillover strength from soyoil, lingering worries over harvest slowdowns in Brazil and the need for new crop futures to rally in attempt to buy spring acres.

 

Meanwhile, a strong technical performance attracted buyers as well, with traders encouraged by the market's resilience to spillover pressure from outside markets, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, South Dakota.

 

Otherwise, activity was subdued with an absence of any significant selling, allowing moderate buying to keep prices firmly planted in positive territory, analysts added.

 

The DTN Meteorlogix weather forecast said Brazil's northern soybean areas, specifically Mato Grosso and Goias, will continue to have moderate to heavy thunderstorms. The rains in the north are becoming somewhat of a concern for maturing soybeans and the early harvest. During the next three days, rainfall totals will range up to one and one-half inches with locally heavier amounts, Meteorlogix reports.

 

The overall weather pattern during the next week will feature a trough over central and eastern South America and a ridge over western South America extending out into the Pacific Ocean. This is a pattern that will feature occasional light showers in the major corn and soybean areas of central Argentina and southern Brazil with no severe heat, Meteorlogix forecasted. Stress to crops will be limited by the scattered light showers and moderate temperature conditions, Meteorlogix said.

 

In other news, Brazil's soybean exports in January rose to 599,600 metric tonnes, up from the 528,800 tonnes shipped in December, the Foreign Trade Ministry said Friday. The number is also higher than the 528,500 tonnes shipped in January 2007.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soyoil futures the upside leader of the day. Soyoil futures set new all-time highs, buoyed by strong technical buying and fresh speculative fund buying, analysts said. The technical reversal experienced Thursday coupled with strong underlying demand served as catalysts to keep sellers at bay throughout, traders added. Light profit taking and scale-down commercial selling helped trim advances, but futures still gapped higher on technical charts, analysts said.

 

Soymeal futures ended with solid gains, feeding off the bullish tonnee in the complex. Speculative buying coupled with only light selling bolstered the gains, while oil/meal spreading limited advances, analysts added.

 

March oil share ended at 44.09% and the March crush ended at 63 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 1,000 lots.

 

In soyoil trades, buyers were scattered among various commission houses. Bunge Chicago sold 300 March, Citi sold 400 May and 300 July, and Newedge USA LLC sold 500 March. Speculative fund buying was estimated at 2,000 lots.