March 21, 2007

 

CBOT Soy Review on Tuesday: Higher; climb to 1-week highs on technical buys

 

 

Chicago Board of Trade soybean futures ended higher Tuesday, climbing to one-week highs on a combination of technical, commercial and speculative buying.

 

May soybeans ended 5 1/4 cents higher at US$7.64 3/4, November soybeans finished 5 cents higher at US$8.08. May soymeal settled US$1.70 higher at US$221.20 per short tonne, while Mary soyoil ended 25 points higher at 31.24 cents a pound.

 

The void of fresh fundamental news kept technical features in play, with good underlying moving average support providing buyers with confidence to break a choppy, two-sided theme, analysts said.

 

Light end user buying aided the advances, with lingering bullish debates over 2007 soybean acreage helping lift prices in the absence of any aggressive selling interest, traders said.

 

The market struggled to find its way for most of the day, with prices chopping around in sideways trade. However, with any fresh news and the combination of technical strength and supportive acreage outlooks, speculative traders remained willing buyers on price breaks, said a CBOT commission house broker.

 

Otherwise, activity was light, with traders taking a cautious approach ahead of the March 30 planting intentions report.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said the Midwest has been mostly dry in the West, but to the east, there have been scattered showers. Early rainfall is good for soil moisture, but too much will interfere with planting.

 

Western areas of the Midwest will see some showers Wednesday, with clear conditions Thursday, before some more light showers return Friday. The eastern Midwest, which has already been soggy, may see some showers Tuesday night into Wednesday. On Thursday, those showers will be concentrated in southern and eastern areas, and then will move west and north within the eastern Midwest on Friday and Saturday, Meteorlogix reports.

 

In pit trades, speculative fund buying was estimated at 2,500 lots. JP Morgan bought 400 may and 500 July, with additional buying scattered among various commission houses. Fimat, Man Financial, and Rand Financial were each light sellers of 200 May.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, bouncing back from mixed early action in unison with soybeans. Soyoil futures were the upside leader of the products, with the nearby May future climbing to its highest price since Feb. 26. Technically inspired buying served as a catalyst for the gains, with the active May future managing to satisfy a nearby upside technical objective of filling a chart gap from late February, analysts say. Strength in crude oil futures aided the gains as well.

 

Soymeal futures climbed to one-week highs, feeding off the supportive tonnee in soybeans, with technical momentum providing a late boost for futures end at session highs, traders said.

 

May oil share ended at 41.39% and the May crush ended at 65 1/2 cents.

 

In soymeal trades, JP Morgan bought 400 May, while Tenco and Rand Financial each sold 300 May.

 

In soyoil trades, JP Morgan bought 500 May and Man Financial bought 400 May. Bunge Chicago sold 500 July, JP Morgan sold 300 May and 600 July, while Fortis sold 300 May. Speculative fund buying was estimated at 2,000 lots and commercial selling was estimated at 1,000 lots.