February 29, 2008

 

CBOT Soy Review on Thursday: Soar on soyoil, commodity-based buying

 

 

Chicago Board of Trade soybean futures ended sharply higher Thursday, fueled by a late speculative push associated with a surge in soyoil and broad base strength in commodities.

 

March soybeans ended 39 1/2 cents higher at US$14.98 1/2, May soybeans settled 37 1/4 cents higher at US$15.12 1/2, July soybeans finished 35 cents higher at US$15.23 3/4 and November soybeans ended 17 cents higher at US$14.24. May soymeal settled US$6.90 higher at US$380.70 per short tonne. May soyoil finished 183 points higher at 67.30 cents per pound.

 

Soyoil remains the bullish engine driving the soy complex, with bullish longer range fundamentals of tightening stocks and strong demand for soybeans continuing to keep speculative buyers enthused, said John Kleist of Kleist Ag Consulting.

 

The rally in soyoil continues to exceed expectations and with bullish outlooks for world stocks moving forward and strength in outside markets, the path of least resistance was easily higher, analysts said.

 

Nearby contracts carved out new all-time highs, with broad based strength seen across commodity markets in general amid inflationary concerns surrounding the weak U.S. dollar and higher energy and metal markets attracting fresh inflows of speculative money, analysts added.

 

Speculative money continues to feed into agricultural commodities from lower performing financial markets and with speculative longs exiting wheat positions, soybeans are benefiting from funds shifting into other grain and oilseeds, traders said.

 

Meanwhile, old crop contracts continued to gain against new crop futures, with some traders saying spreads are the one area that truly reflects fundamentals.

 

Deliveries against CBOT March soybean, soyoil and soymeal contracts on first notice day Friday have the potential to be large, analysts said. Analysts expect deliveries against the CBOT March soybean contract to fall in a range of 500 to 4,000 lots, with most analysts leaning toward a range of 1,000 to 3,000 lots.

 

Soyoil delivery notices are expected in a range of 3,000 to 10,000 contracts, while soymeal deliveries are seen between 1,000 and 2,000 lots. As of 5:00 p.m. EST Wednesday, 3,467 soybean contracts, 12,736 soyoil contracts and 2,209 soymeal contracts were registered for delivery at CBOT approved warehouses.

 

In pit trades, buyers and sellers were scattered across various commission houses, with speculative funds estimated near 6,000 lots.

 

 

SOY PRODUCTS

 

Soyoil futures posted another record high close Thursday, soaring on the combination of speculative and commercial buying. The extreme nervousness of importers in the world edible oil market amid tight world vegoil stocks continues to produce chaotic buying in soyoil futures, said Kleist. Another strong week of exports served as validation of solid demand, with a surge in crude oil futures above the US$101 per barrel level attracting speculative interest as well, analysts added.

 

Soymeal futures rallied in unison with the gains in soyoil and soybeans. Meal received speculative interest by default, as the rise in the rest of the complex dragged futures along for the ride, as traders attempted to keep spreads in line, analysts said.

 

March oil share ended at 47.08% and the May crush ended at 65 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered across various commission houses, with speculative funds estimated near 3,000 lots.

 

In soyoil trades, buyers and sellers were scattered across various commission houses, with speculative funds estimated near 6,000 lots.