March 26, 2008

 

CBOT Soy Review on Tuesday: Extends recovery on speculative buys; limit up

 

 

Chicago Board of Trade soybean futures ended Tuesday's session sharply higher, locked at the 50-cent upper daily trading limits, continuing a recovery from prior losses on inflationary-based buying and supportive demand outlooks.

 

May soybeans settled 50 cents higher at US$13.07, July soybeans finished 50 cents stronger at US$13.22 and November soybeans ended 50 cents firmer at US$12.39. May soymeal settled up US$20.00 at US$350.30 per short tonne. May soyoil finished 200 points higher at 57.77 cents per pound.

 

The weakness in the U.S. dollar served as the catalyst to attract speculative buying, with strong advances in gold providing an inflationary influence to keep bullish enthusiasm flowing, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The lingering farmers strike in Argentina provided psychological support to prices also, as rumors of world importers shifting demand from Argentina to U.S. origin served as a fundamental spark to keep buyers in control of price direction, he added.

 

Otherwise, traders said the market's gains were attributed to fresh speculative money flowing back into commodities, as stability in outside financial markets and inflationary concerns shed an attractive light on the market, analysts added.

 

Meanwhile, analysts expect soybean futures to continue to gather upward strength heading toward next week's prospective plantings report, as the uncertainty of 2008 acreage and weather paints murky picture for the market, a CBOT floor analyst said.

 

With dwindling old-crop inventories, strong 2008 production is needed to sustain adequate stocks levels in the 2008-09 marketing year, he added.

 

Looking forward, traders said the gains should carry into overnight trade, as the synthetic option price points toward further gains. May soybeans were synthetically trading between US$13.58 and US$13.61 on the close, traders said. May soymeal was synthetically trading between US$358.00 and US$359.00 on the close, and May soyoil was reported at a synthetic price of 58.00 to 58.25c, traders said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures soared to their respective upper daily trading limits, buoyed by speculative led buying, as the markets continue their recovery from last week's meltdown, analysts said. Soymeal futures rallied to their US$20 daily trading limit for the second consecutive day, feeding off inflationary-based speculative buying and talk of increased export demand due to a farmer strike slowing exports from Argentina, analysts added.

 

Soyoil futures rallied in unison with the rest of the complex, feeding off the reemergence of speculative fund buying in commodities, traders said.

 

Nevertheless, soyoil continues to lose product share to soymeal, as traders point toward a shift in the product spread relationship, analysts said.

 

May oil share ended at 45.19% and the May crush ended at 99 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.