February 14, 2008

 

CBOT Soy Review on Wednesday: End up; climbs on demand rumblings

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, managing to divorce themselves from the defensive tonnee in neighboring grains, as rumors of fresh demand buoyed prices, analysts said.

 

March soybeans ended 7 1/2 cents higher at US$13.28 1/2, July soybeans finished 7 cents higher at US$13.56 1/4 and November soybeans ended unchanged at US$12.71. March soymeal settled US$0.50 lower at US$351.80 a short tonne. March soyoil finished 60 points higher at 56.26 cents a pound.

 

A quiet news front kept futures in a consolidative mode for most of the day, but rumors of China buying a couple of cargoes of soybeans and soyoil upon its return from Lunar New Year holidays provided a boost to underpin prices, a CBOT floor analyst said.

 

Otherwise, futures had little direct influences with spillover weakness from CBOT corn and wheat applying pressure, while a 90-cent run-up in Minneapolis wheat and advances in crude oil futures managed to lend support, traders said.

 

Stout underlying demand remains an underpinning feature, with solid demand in the products keeping the crush active and with lingering uncertainty surrounding South American production, traders remain cautious sellers, analysts added.

 

Looking forward, traders anticipate a consolidative theme to continue, with prices hovering in a wide range until a clearer fundamental picture of the market carries out through the South American harvest, with traders looking ahead to next week's U.S. Department of Agriculture Outlook Conference for clues to future direction, a cash connected CBOT broker added.

 

The DTN Meteorlogix Weather Service forecast said soybean harvest areas of northern Brazil will have showers and a few harvest delays, but rainfall doesn't appear to be very heavy. A frontal boundary, which produced moderate to heavy rains over southern Brazil, has weakened dramatically during the past two days as it moved northward into the major soybean areas of central Brazil. This could be a sign that the worst is over in terms of harvest delays in central Brazil and a pattern of more normal rainfall and not excessive rainfall is now under way, Meteorlogix reports.

 

Crops in southern Brazil and Argentina have a generally favorable weather pattern ahead. In southern Brazil, there are no significant concerns for filling soybeans, Meteorlogix said. It will be drier during the next five days but not hot. A round of showers is in store for next week. In central Argentina, crops will benefit from warmer weather during the balance of this week, after several days of below-normal temperatures. The next chance for rain appears to be from later this weekend into early next week, Meteorlogix added.

 

On tap Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST. Trade estimates put soybean export sales at 350,000 to 800,000 metric tonnes. Soymeal sales are projected in a range of 100,000 to 200,000 metric tonnes, with soy oil sales expected in 10,000 to 40,000 tonnes range.

 

The National Oilseed Processors Association's monthly soybean crush report for January is scheduled to be released Thursday at 8:30 a.m. EST, with the crush expected to be 154.6 million bushels, nearly steady from the previous report, according to a survey of industry analysts conducted by Dow Jones Newswires. NOPA soyoil stocks in January are expected to climb to near 2.764 billion pounds from the 2.712 billion pounds reported for December. Estimates ranged from as low as 2.714 billion pounds to as high as 2.795 billion pounds.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated between 1,000 and 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil rising on demand talk and spillover strength from crude oil futures. Soyoil futures ended higher, firmly planted in positive territory, as the combination of rumors of fresh China buying, meal/oil spread unwinding and borrowed momentum from crude oil attracted speculative buyers, analysts said.

 

Soymeal futures ended with modest declines, unable to feed off the bullish tonnee in the rest of the soy complex amid spreading between the products, analysts said. Soymeal succumbed to spillover pressure from neighboring grain futures also, analysts added.

 

March oil share ended at 44.43% and the March crush ended at 64 1/4 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, with speculative fund buying estimated between 2,000 and 3,000 lots.