February 15, 2008

 

CBOT Soy Review on Thursday: Soyoil hits new high amid demand hopes

 

 

Chicago Board of Trade soybean futures finished sharply higher Thursday on spillover support from a record high in soybean oil and expectations for increased Asian demand, analysts said.

 

March soybeans ended 39 1/2 cents higher at US$13.68 per bushel, and November soybeans rose 34 1/2 US$13.05 1/2. March soyoil was up 190 points at 58.16 cents per pound, and March soymeal was up US$7.60 at US$359.40 per short tonne.

 

Soybeans felt borrowed strength from a rally in soyoil, which climbed following sharp gains overnight in palm oil futures, analysts said. Palm oil ended at a new closing high Thursday amid talk that up to 40% of China's rapeseed crop has been damaged by the recent winter storms, they said.

 

Expectations for increased interest from Asian buyers for vegetable oils also were bullish, traders said.

 

"The majority of the strength that we see is that when China gets back into the full swing after the holidays, after that there will be demand for U.S. soybeans" and for palm oil, said Joe Victor, vice president of marketing for Allendale.

 

Commodity funds bought an estimated 6,000 soybean contracts. In pit trades, ADM bought 1,000 May. JP Morgan bought 400 May.

 

In other news, U.S. weekly soybean export sales totaled 331,600 metric tonnes for the week ended Feb. 7, slightly below the 350,000 to 800,000 tonnes expected by analysts. One trader termed the sales as "poor," while others saw them as neutral.

 

Included in the total were sales of 3,200 tonnes for delivery in the 2008-09 marketing year. Sales for the 2007-08 marketing year were 68% below the previous week and 58% below the prior four-week average, the USDA said. Mexico, Germany and Spain were the largest buyers for the week.

 

"The big driver right now is China demand and pinning (demand) hopes on it," Victor said.

 

In other news, a weak to moderate ridge may lead to a brief, two- to four-day period of hot and dry weather over southern Brazil and Argentina soybean areas during the short-range period, DTN Meteorlogix said. Long-range charts continue to suggest that rains will return to the area by the middle of next week, ending any stress to filling soybeans, the private weather firm said.

 

 

Soy Products

 

CBOT soy product futures finished with steep gains following the overnight rally in crude palm oil futures, traders said. July soyoil set a new all-time high at 59.39 cents per pound.

 

The rally in palm oil was bullish for the entire soy complex, an analyst said. The expectations for increased demand also were supportive, he said.

 

Commodity funds bought an estimated 5,000 soyoil contracts and 3,000 soymeal contracts. In pit trades, ADM bought 100 March soyoil and sold 700 May soyoil. Rosenthal bought 500 March soyoil.

 

In other news, the National Oilseed Processors Association reported its members crushed 152.439 million bushels of soybeans in January, under the average analyst estimate of 154.6 million bushels. A trader noted that the crush, although less than expected, did not have much of a market impact, a CBOT trader said.

 

Soyoil stocks of 2.818 billion pounds were more than expected. Still, that did not have a major influence on prices, the trader said.