March 1, 2007

 

CBOT Soy Review on Wednesday: Finishes higher in recovery from losses

 

 

Chicago Board of Trade soybean futures ended higher Wednesday in a recovery from heavy losses Tuesday, analysts and traders said.

 

March soybeans finished 9 3/4 cents up at US$7.73 1/4 per bushel, while May soybeans ended 8 3/4 cents higher at US$7.87 1/2. November soybeans closed up 7 3/4 cents at US$8.24 1/4.

 

May soymeal ended US$1.00 higher at US$230.70 per short tonne, and May soyoil finished 7 points higher at 30.76 cents per pound.

 

Soybean prices closed sharply lower Tuesday amid profit-taking and a steep selloff in Chinese stocks, analysts said. On Wednesday, however, China's stock market stabilized, and an absence of new selling pressure opened the door for recovery buying, they said.

 

The soybean market earned back a good chunk of Tuesday's losses.

 

"I guess you could say that those (China) concerns today, if not alleviated, have been mollified some," said Phil Roach, a manager at Roach Ag Marketing. "It looked like people's short-term memory kind of forgot about (China), and we're back on track with the same bull market we've had."

 

Long-range concerns about the potential loss of soybean acres to corn this spring remain an underlying bullish storyline, traders say. U.S. farmers are expected to plant more corn, largely at the expense of soybeans, to take advantage of sharp demand for ethanol.

 

Modest adjustments to U.S. corn balance sheet projections are expected to come out of the U.S. Department of Agriculture's outlook forum, which will be held Thursday and Friday. Some market participants were hesitant to sell ahead of the conference, a CBOT floor broker said.

 

Fund buying of an estimated 2,000 contracts also was supportive, a trader added.

 

In pit trades, ADM bought 600 May, and UBS bought 500 May. Fimat, Prudential and Rand Financial each bought 300 May. JP Morgan and Man Financial each sold 400 May, while Citigroup sold 300 May.

 

JP Morgan spread 600 March/May, while FC Stonnee and Fimat each spread 500 March/May.

 

Looking ahead, Roach said performance in outside and overseas markets could affect the performance of soybeans Thursday.

 

"It's a long way until tomorrow," he said.

 

On Thursday, the USDA will report weekly soybean export sales. Analysts surveyed by Dow Jones Newswires expect sales to be 300,000 to 500,000 metric tonnes.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended higher alongside soybeans as funds bought soyoil, floor traders said. Funds bought an estimated 1,500 soyoil and sold an estimated 1,300 soymeal.

 

Technical buying and light speculative buys also supported prices in a recovery from losses Tuesday, a trader said. There was some short covering, he added.

 

In soyoil pit trades, Shatkin-Arbor sold 1,400 May and UBS sold 500 May. Tenco bought 500 July and sold 500 July. Fortis spread 700 March/May soyoil.

 

Gains in soybeans spilled over as support for meal, a floor broker said.

 

In soymeal spread trades, UBS spread 500 May/July, while Tenco spread 500 July/May. Tenco also spread 500 December/July, while Man Financial spread 500 August/July.