February 8, 2008
CBOT Soy Review on Thursday: Climbs on late spec buys, short covering
Chicago Board of Trade soybean futures ended higher Thursday, bouncing back from earlier losses on late speculative buying and short covering as bullish longer-range fundamentals remain an underpinning theme, analysts said.
March soybeans ended 13 cents higher at US$13.31 1/2, July soybeans finished 10 1/2 cents higher at US$13.62 1/4 and November soybeans ended 1 1/2 cents higher at US$12.81. March soymeal settled US$9.90 higher at US$361.70 per short tonne. March soyoil finished 4 points lower at 55.12 cents per pound.
Traders did not want to head into Friday's supply-and-demand report short, as bullish outlooks and a lack of resolve by market bears to press the market uncovered buying interest, a cash-connected CBOT broker said. Spillover support from a bounce in soymeal fed bullish appetites as well, he added.
The market's ability to bounce following Wednesday's technical reversal was seen as supportive, and served as evidence market bulls are not willing to throw in the towel yet, a CBOT floor analyst said.
Consolidative trade was featured in choppy two-sided action for most of the day, but once technical selling was exhausted, bullish fundamentals emerged to trump bearish momentum, traders said. Higher-than-expected weekly sales, a recovery in outside markets, spillover support from limit wheat futures and bullish outlooks toward tightening ending stocks served as catalysts to lift futures into the close, traders added.
Traders are optimistic the market remains in a bullish uptrend and confirmation of a tighter balance sheet Friday will benefit that theme, particularly with news scarce amid the closure of Asian markets for the Lunar New Year Holiday, analysts said.
The DTN Meteorlogix weather forecast said heavy rains continue to raise concerns for maturing soybeans in Brazil's Mato Grosso and Goias. However, the general weather pattern is not as wet in Mato Grosso as was seen over the past three weeks. This is a more beneficial situation for soybean ripening and harvest.
Soybean areas of southern Brazil's Rio Grande do Sul and Parana states will have scattered rains during the coming weekend, Meteorlogix said. In Argentina's central crop belt, there is still a fair to good chance for significant thundershower activity during the next 24 to 48 hours, Meteorlogix said.
The U.S. Department of Agriculture reported total weekly soybean export sales were 1,068,000 metric tonnes for the week ended Jan. 31; 2007-08 marketing-year sales totaled 1,037,000 tonnes. Analysts had forecast sales between 500,000 and 900,000 metric tonnes.
Soymeal sales were a net 368,100 tonnes, above trade estimates of 100,000 to 150,000 tonnes; 2007-08 sales totaled 365,800 tonnes. Soyoil commitments were 40,900 metric tonnes, within trade estimates of 10,000 to 70,000 tonnes.
In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated near 2,000 lots.
SOY PRODUCTS
Soy product futures ended mixed, with soymeal futures climbing on short covering and bullish export demand data. Higher-than-expected weekly export sales provided a bullish spark for soymeal futures, analysts said. Strong global feed demand coupled with the ability of the market to hold technical support at Wednesday's lows generated buying down the stretch, analysts added.
Soyoil futures ended mixed, following a consolidative two-sided session. The market was under pressure from technical selling, while underlying demand provided support, analysts said. However, the unwinding of some oil-meal spreads allowed meal to gain on oil, despite solid weekly export sales, traders said.
March oil share ended at 43.24% and the March crush ended at 70 1/2 cents.
In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated near 2,000 lots.
In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated near 2,000 lots.
