March 13, 2007

 

CBOT Soy Review on Monday: Higher on technical buys, acreage concerns

 

 

Chicago Board of Trade soybean futures ended a two-sided session moderately higher Monday, garnering strength from technical buying and talk of the need to push prices in an attempt to buy acres.

 

May soybeans ended 5 1/4 cents higher at US$7.65. May soymeal settled US$1.40 higher at US$223.20 per short tonne, while Mary soyoil ended 12 points higher at 30.71 cents a pound.

 

The combination of talk of buying acres, harvest problems in northern Brazil, a truckers strike in Argentina, and technical buying served as catalysts to propel prices in the face of price weakness in neighboring grains, said Jack Scoville, analyst with the Price Futures Group in Chicago.

 

Traders said the market's focus is clearly on 2007 plantings, and with rumors of a commercial firm projecting a decent drop in U.S. soybean acreage, futures found underpinning support.

 

However, futures did test both sides of unchanged levels during the session, briefly backpedaling on spillover weakness from a speculative-led drop in corn futures, with weakness in crude oil adding light pressure, analysts said.

 

Nevertheless, as the day drew to a close, soybean/corn spreading and light short covering emerged to generate support. Technical buying was featured also, with the ability of active contracts to eclipse resistance at their 10-day moving averages and last week's highs, providing some strength, analysts added.

 

The DTN Meteorlogix Weather forecast said South America's crop conditions remain generally favorable. Northern Brazil's soybean harvest has only isolated light showers ahead this week. Southern Brazil has a more variable situation regarding rainfall. Parana and Rio Grande do Sul had rains of up to two inches during the past weekend. The moisture benefited late-filling soybeans, but early harvest has been interrupted by the rainfall, Meteorlogix reports.

 

Meanwhile, the U.S. Department of Agriculture reported 27.702 million bushels of soybeans were inspected for export in the week ended March 8. The export figure is up 2.9% from the previous week's 26.922 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 26 million to 35 million bushels.

 

In pit trades, FCStonnee bought 1,700 July, Fimat bought 600 May, and UBS Securities bought 300 May. Sellers were lightly scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, climbing in unison with soybeans. Light speculative buying underpinned the products. With concerns over the potential for a significant reduction in soybean acres in 2007 and technical buying, futures managed to withstand the defensive influences of neighboring grains and weakness in crude oil futures, analyst say.

 

May oil share ended at 40.76% and the May crush ended at 63 3/4 cents.

 

In soymeal trades, speculative funds were estimated light buyers on the day, with Bunge Chicago a seller of 400 May and Fimat a seller of 300 May.

 

In soyoil trades, buyers and sellers were scattered among various firms, speculative funds estimated as net buyers on the day.