February 16, 2008

 

CBOT Soy Review on Friday: Up on soyoil, technical buys, demand outlooks

 

 

Chicago Board of Trade soybean futures ended higher Friday, buoyed by spillover strength from soyoil, an optimistic outlook for demand and technical strength.

 

March soybeans ended 5 3/4 cents higher at US$13.73 3/4, July soybeans finished 7 3/4 cents higher at US$14.02 1/2 and November soybeans ended 12 cents higher at US$13.17 1/2. March soymeal settled US$0.60 lower at US$358.80 per short tonne. March soyoil finished 41 points higher at 58.57 cents per pound.

 

The market continues to find just enough support to sustain its bullish uptrend, managing to carve out new contract and all-time highs amid strong demand, outside market support and a general lack of bearish influences in the market, analysts said.

 

Futures spiked to new highs from the opening, feeding off carryover technical momentum from the run to new highs in the overnight session, traders said. A bullish demand outlook, with news that a winter storm damaged an estimated 40% China's rapeseed crop, sparked speculation of increased oilseed imports by China, traders added.

 

The exhaustion of buying at the highs attracted profit taking ahead of the extended holiday weekend, with a pullback in wheat and crude oil futures pulling futures into negative territory through midday. However, as the day drew to a close, buyers returned to the market, with spillover strength from a late spike to new highs in soyoil rekindling buying interest and short covering, analysts said.

 

Looking ahead, the market continues lack a significant selling presence and until there is fresh fundamental news to derail the bullish theme, traders expect prices to hold firm, aside from minor profit taking corrections, a CBOT floor analyst said.

 

The DTN Meteorlogix Weather Service forecast said northern Brazil's Mato Grosso has only scattered, light rain showers forecast through the middle of next week. This sector of Brazil's soybean belt is starting to have a drier weather pattern at a very opportune time for harvest, Meteorlogix added. Weather models Friday indicate rains for the southern soybean belt of Brazil during the next five days. This will be generally beneficial moisture.

 

In Argentina, a few thundershowers developed overnight Thursday into Friday. Cooler weather returns early next week along with more showers, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, with soyoil rallying to new all-time highs. Soyoil futures rallied Friday, emerging as the strongest link in the soy complex. Strength in world vegetable oil markets on optimism for higher imports by China due to its damaged rapeseed crop sent bullish waves through the market, analysts said. Technical strength added support to extend the advances as well, traders said.

 

Soymeal futures ended mostly higher, but oil/meal spreading applied pressure to limit upside potential, analysts added.

 

March oil share ended at 44.94% and the March crush ended at 60 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.