March 23, 2007

 

CBOT Soy Review on Thursday: Higher; speculatives buy on acreage concerns

 

 

Chicago Board of Trade soybean futures ended higher Thursday, fueled by speculative buying as acreage uncertainties continue to underpin prices.

 

May soybeans ended 5 1/4 cents higher at US$7.71 3/4 a bushel, November soybeans finished 4 1/2 cents higher at US$8.15 1/4, November 2008 soybeans ended 13 cents higher at US$8.39 1/4. May soymeal settled US$1.10 higher at US$223.40 a short tonne, while May soyoil ended 18 points higher at 31.28 cents a pound.

 

The market is back on the acreage kick, with uncertainty tied to 2007 acreage continuing to attract speculative buyers, said Mike Zuzolo, a senior analyst with Risk Management Commodities in Lafayette, Ind.

 

Deferred-month contracts played a large part in the day's trend, with the 2008 November future leaping to a new contract high. The funds bought the back end of the market on the premise that it is going to get harder to attract more soy acres next year as demand for corn-based ethanol expands, Zuzolo added.

 

In addition, the market is looking to encourage expanded acreage in South America next year, analysts added.

 

Spreading between crop years added to the day's theme, with spillover momentum outside crude oil futures attracting speculative interest as well. Wet Midwest weather outlooks were trumped by acres Thursday, as traders looked at the longer-term outlook rather than focusing on potential planting delays for corn, a CBOT floor analyst said.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said showers are expected Friday and Saturday in the western Midwest, with up to an inch and a half of rain in southern parts of the region. The eastern Midwest will see rain through Saturday, with totals up to an inch and a half generally, but heavier locally. Temperatures are averaging above normal across the region, Meteorlogix reported.

 

In other news, the Brazilian Vegetable Oil Industries Association, or Abiove, raised its 2006-07 soybean crop estimate to 58.6 million metric tonnes Thursday from 57.1 million tonnes on March 6.

 

The Census Bureau reported soybeans crushed in February totaled 136.9 million bushels. Soyoil stocks climbed to 3.318 billion pounds from January's 3.202 billion, and Soymeal stocks were reported at 292,640 short tonnes. The stock figure was down from January's 372,675 and below the average estimate of 356,000.

 

The U.S. Department of Agriculture reported weekly soybean export sales totaled 523,300 metric tonnes for the week ended March 15. Included in the total were sales of 1,000 metric tonnes for the 2007-08 marketing year.

 

In pit trades, FCStonnee bought 200 November, and Tenco, Calyon Financial, Fimat and Fortis each bought 200 May. Tenco bought 300 2008 November futures. Goldenberg Hehmeyer sold 800 November, Tenco sold 300 November, and Fimat sold 200 May. Speculative funds were estimated buyers of between 1,000 and 2,000 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, with speculative buying helping propel the products with soybeans. Soymeal futures climbed on light fund-buying, with supportive stocks data from the census crush report and technical strength underpinning prices, analysts said.

 

Soyoil futures ended higher, consolidating after Wednesday's setback. Spillover support from a firm tonnee in crude oil futures as well as the bullish influence of higher soybean futures combined to firmly plant futures in positive territory, analysts said.

 

The May oil share ended at 41.18% and the May crush ended at 63 3/4 cents.

 

In soymeal trades, JP Morgan, Citigroup and Fimat each bought 300 May. Speculative fund-buying was estimated near 2,000 lots. JP Morgan sold 700 May, Fimat sold 300 May and UBS Securities sold 200 May.

 

In soyoil trades, speculative funds were estimated buyers of between 1,000 and 2,000 contracts. JP Morgan bought 500 May, Fimat and Rand Financial each bought 300 May, with Tenco, Term Commodities and Man Financial each buying 200 May. Fimat sold 400 July, and Bunge Chicago, JP Morgan and Prudential Financial each sold 300 May.