March 22, 2007

 

CBOT Soy Review on Wednesday: End up on technical strength; acres outlooks

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, underpinned by technical strength and lingering talk of bullish acreage outlooks.

 

May soybeans ended 1 3/4-cents higher at US$7.66 1/2, November soybeans finished 2 3/4 cents higher at US$8.10 3/4. May soymeal settled US$1.10 higher at US$222.30 per short tonne, while May soyoil ended 14 points lower at 31.10 cents a pound.

 

Bullish acreage talk remains an underpinning feature of the market, with follow through technical buying from Tuesday's gains providing initial price strength, said Brian Hoops, president Midwest Market Solutions in Yanktonne, South Dakota.

 

Futures rallied to three-week highs on initial strength, but their inability to breach overhead resistance coupled with reports of South American hedge pressure capped the rally, Hoops added.

 

Spillover weakness from a late retreat in soyoil futures applied mild pressure to keep a lid on advances as well, traders added. Nevertheless, futures continue to find underlying support from a lack of aggressive selling, and ideas the market needs to hold prices firm to make sure soybeans won't loose too many acres in 2007, Hoops said.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said up to two inches of rain is forecast for the Iowa-Missouri border by the end of the week. Lesser amounts, about a quarter inch to an inch, are expected across the rest of Iowa and Missouri.

 

Farther east, up to an inch and a half of rain in northern Illinois and Indiana is expected as more scattered thundershowers pelt the area through the end of the week. The system will move east and south during the weekend, Meteorlogix forecasts.

 

On tap for Thursday, the Census Bureau is scheduled to release its February soybean crush report at 8 a.m. EDT (1200 GMT). The average of analyst estimates peg the crush at 137.9 million bushels, down from the January crush figure of 156.9 million bushels. Soyoil stocks are seen increasing to 3.217 billion pounds in the report, up from 3.155 billion the previous month. February soymeal stocks are seen declining to 356,000 short tonnes, down from the 393,374 reported for January.

 

U.S. Department of Agriculture is scheduled to release weekly export sales figures for the week ended March 15 at 7:30 a.m. CDT. Analysts surveyed by Dow Jones Newswires estimated sales would range from 350,000 to 550,000 metric tonnes. Soymeal commitments were estimated in a range of 75,000 to 125,000 tonnes and soyoil sales were estimated in a range of zero to 10,000 tonnes.

 

In pit trades, speculative fund buying is estimated at 2,000 lots. Rand Financial bought 800 May, with Fimat, Fortis and Man Financial each buyers of 200 May. Sellers were widely scattered among various commission houses, with JP Morgan a seller of 300 November and Calyon Financial a seller of 200 May.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil stumbling lower on speculative profit taking. Active soyoil contracts made new highs for the month in early trade, but its inability to challenge contract highs encouraged selling and profit taking, Hoops said. A lot of the recent gains were technically driven, and futures had become a little overbought, Hoops added.

 

Soymeal futures ended higher, benefiting from soyoil/soymeal spread unwinding, technical strength and spillover support from soybeans.

 

May oil share ended at 41.16% and the May crush ended at 65 1/4 cents.

 

In soymeal trades, speculative funds were net buyers on the day. Buying was scattered among various commission houses. Bunge Chicago sold 400 May, Rand Financial sold 200 July and Rosenthal sold 200 May.

 

In soyoil trades, Rand Financial bought 2,000 May, Fimat bought 300 May, and Bunge Chicago bought 200 May. Bunge Chicago sold 400 May and 400 July, JP Morgan sold 300 May and 200 July, Fimat and Rand Financial each sold 400 May. Speculative fund buying was estimated at 2,500 contracts.