February 26, 2008

 

CBOT Soy Review on Monday: New highs; extends bullish uptrend

 

 

Chicago Board of Trade soybean futures ended sharply higher Monday, carving out new all-time highs once again, with strong underlying demand and bullish momentum fueling upside movement.

 

March soybeans ended 32 cents higher at US$14.52, May soybeans settled 31 cents higher at US$14.69 1/4, July soybeans finished 32 3/4 cents higher at US$14.85 1/2 and November soybeans ended 26 1/2 cents higher at US$14.17. May soymeal settled US$6.30 higher at US$374.50 per short tonne. May soyoil finished 131 points higher at 64.33 cents per pound.

 

Carryover buying from overnight trade set the stage for the gains, with rallies in Chinese soybean and Malaysian palm oil futures, and talk of world exporters slowing exports in an effort to stave off food inflation, buoying prices, analysts said.

 

The overseas prices kind of took off, and that served as the trigger for the gains, as building momentum in agricultural markets seemed to feed into bullish market sentiment, analysts added.

 

New record highs were set across the board, with spillover support from surging wheat futures and lingering acreage concerns providing additional support to aid the firm tonnee, traders said.

 

Looking ahead, traders said Monday's extension of the bullish uptrend leaves a void in upside price objectives and opens the door for volatile price action moving forward until fresh fundamental news surfaces as the planting season nears.

 

Meanwhile, the DTN Meteorlogix weather forecast said Brazil's largest soybean-growing province, Mato Grosso, faces harvest disruptions during this coming week because of renewed rainfall. Forecast maps for the period through Thursday, March 6, indicate a split jet stream pattern over South America. The northern branch is mainly located over northern and some of central Brazil for most of this period. This means additional chances for rain and thunderstorms in key crop areas of Mato Grosso, Goias, Bahia, Minas Gerais and possibly for Sao Paulo and Mato Grosso do Sul, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 5,000 lots.

 

 

SOY PRODUCTS

 

Soy-product futures soared higher Monday, with both soyoil and soymeal each setting new contract highs. Soyoil futures produced new all-time highs, rallying on the heels of strong world vegoils demand, analysts said. New record-high gains in Malaysian Palm Oil futures overnight and talk of China securing cargoes of soybeans and soyoil to stave off inflation as well as acquire enough inventories ahead of the summer Olympics attracted speculative buyers, analysts added.

 

Soymeal futures set new contract highs, feeding off the bullish wave filtering through the complex - pulled higher in an attempt to keep product spreads in line, traders said. Spillover support from neighboring grain markets added strength, as world feed markets remain underpinned, analysts added.

 

March oil share ended at 46.43% and the May crush ended at 62 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with Rosenthal a featured seller of 1,000 lots. Speculative funds were estimated buyers of 4,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 3,000 lots and commercial firms buyers of an estimated 2,000 lots.