March 20, 2007

 

CBOT Soy Review on Monday: Settles up on technical buys, acreage concerns

 

 

Chicago Board of Trade soybean futures ended higher Monday, supported by technical buying and lingering concerns over 2007 soybean acreage.

 

May soybeans ended 6 cents higher at US$7.53 1/2, November soybeans finished 9 1/2 cents higher at US$8.03. May soymeal settled US$1.50 higher at US$219.50 per short tonne, while Mary soyoil ended 22 points higher at 30.99 cents a pound.

 

The soybean market's strength was rather impressive in the face of lower corn and wheat futures for most of the day, said Chad Henderson, analyst with Prime Agricultural Consultants Inc. in Brookfield, WI.

 

The big picture in soybeans is the market's ability to hold major moving average support at its respective 50-day moving averages, and that attracted speculative buyers to defend market length, Henderson added.

 

A quiet news front kept attention focused on technical factors, with a bullish acreage debate continuing to keep prices underpinned, analysts said. Aggressive bear spreading was a feature, as new crop contracts remain the driving force behind market strength in the face of acreage uncertainties, Henderson said.

 

The DTN Meteorlogix Weather Service forecast said central U.S. crop areas will experience a change this week as a pressure trough moves in. The western Midwest will see the effects of this weather system Tuesday night with up to about an inch of rain in the south and about half an inch farther north, with locally heavier showers possible.

 

For the eastern Midwest, up to about half an inch of rain will continue into Monday night, but will stop Tuesday. Wednesday through Friday, a quarter inch up to an inch of rainfall is expected. As the Midwest gears up for spring planting, the moisture is welcomed, but fieldwork will be delayed. Temperatures across the Midwest are expected to trend above-normal for the rest of the week, Meteorlogix forecasts.

 

U.S. Department of Agriculture reported 21.184 million bushels of soybeans were inspected for export in the week ended March 15. The export figure was down 31% from the previous week's 30.571 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 25 million to 40 million bushels. Accumulated soy inspections total 821.141 million bushels, up 22.2% from the 671.789 million bushels reported at the same time last year.

 

In pit trades, Rand Financial bought 500 May, JP Morgan bought 200 May and ADM Investor Services bought 200 November. JP Morgan sold 300 May, Rand Financial, Fortis and Tenco each sold 200 May, RJ O'Brien and Tenco each sold 200 July. Speculative fund buying was estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board Monday, climbing in unison with advances in soybeans. Soyoil futures bounced on speculative and technical buying, as nearby prices climbed to their highest level since February 28. The ability of futures to eclipse resistance at Friday's highs accelerated the gains, with a late burst of local fund buying underpinning prices down the stretch, traders said.

 

Soymeal advanced on the heals of soybeans, with technically motivated buying a feature once the nearby May futures pierced above the contract's 50-day moving average, analysts said.

 

May oil share ended at 41.38% and the May crush ended at 64 1/4 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses. JP Morgan and Rosenthal were featured buyers, with JP Morgan and Fortis key sellers. Speculative funds were light net buyers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with Citigroup buying 1,000 May, and Fimat a buyer of 200 May. Speculative fund buying was estimated at 1,500 lots.