February 22, 2008

 

CBOT Soy Review on Thursday: Climb on soyoil, demand, acres talk

 

 

Chicago Board of Trade soybean futures ended higher Thursday, climbing on late speculative buying amid soyoil strength, underlying demand and bullish acreage outlooks.

 

March soybeans ended 8 cents higher at US$14.05 3/4, May soybeans settled 7 3/4 cents higher at US$14.24 3/4, July soybeans finished 8 3/4 cents higher at US$14.39 1/2 and November soybeans ended 12 1/2 cents higher at US$13.78 1/2. March soymeal settled US$1.10 lower at US$359.30 per short tonne. May soyoil finished 65 points higher at 62.12 cents per pound.

 

Underlying speculative buying enabled futures to break out of a choppy theme in late trade, shaking off scattered speculative sales on talk of strong world demand for soybeans and soyoil, and the need to propel new crop prices in an effort to secure adequate spring acreage, analysts said.

 

Strength in outside metal markets in conjunction with a weaker U.S. dollar and technical momentum aided the higher tonnee, but the inability of futures to challenge overnight highs attracted profit-taking pressure to promote two-sided trade during the session, traders said. The theme was consistent until a late bounce in soyoil provided spillover strength to lift prices heading into the close, traders added.

 

Looking ahead, traders anticipate prices will continue to find support on breaks, with downside momentum limited until a clear picture of South American production and U.S. acreage can be spelled out amid tightening stock forecasts, analysts said.

 

On tap for Friday, 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 450,000 to 1,000,000 metric tonnes. Soymeal sales are projected in a range of 100,000 to 150,000 metric tonnes, with soy oil sales expected in 10,000 to 30,000 tonnes range.

 

U.S. soybean planted area is expected to reach 71 million acres in 2008, USDA Chief Economist Joseph Glauber said Thursday at the annual Agricultural Outlook Forum. The 2008-09 acreage estimate is up from a year ago, when 63.7 million acres were seeded to soybeans, but unchanged from the USDA's baseline projection released Feb. 12.

 

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

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil futures continuing their charge to uncharted territory on talk of strong world vegetable-oil demand. Soyoil remains buoyed by demand outlooks, with lingering talk of fresh demand from China an underpinning theme, analysts said. The market carved out new all-time highs, impressing market bulls amid its ability to rally despite sharp intraday losses in crude oil futures, analysts added.

 

Soymeal futures ended mixed, with actively traded nearby contracts on the defensive from oil/meal spreading, traders said.

 

March oil share ended at 46.04% and the March crush ended at 59 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds net sellers on the day.

 

In soyoil trades, ADM Investor Services bought 300 May, Newedge USA bought 500 May and 800 December, and UBS Securities bought 300 March. ADM Investor Services sold 300 March, RJ O'Brien sold 500 May, with scattered selling seen across various commission houses. Speculative fund buying was estimated between 2,000 and 3,000 lots.