March 30, 2007

 

CBOT Soy Review on Thursday: Settles higher on speculative buys, soyoil rally

 

 

Chicago Board of Trade soybean futures ended higher Thursday, rallying to 1-month highs on speculative-led buying.

 

May soybeans ended 7 1/2 cents higher at US$7.78 1/4, and November soybeans finished 6 3/4 cents higher at US$8.20. May soymeal settled US$0.30 higher at US$218.60 per short tonne. May soyoil ended 56 points higher at 32.97 cents a pound, just shy of its intraday and new contract high of 33.00.

 

The combination of bullish plantings report speculation and spillover momentum from new contract highs in soyoil served as catalysts to propel soybeans higher, analysts said.

 

The market is showing its bullish perspective for 2007 U.S. soybean acreage and with soyoil making new highs, speculative funds were willing buyers, a CBOT floor analyst added.

 

Technically inspired buying was a featured attraction as well, with the ability of active futures to push into chart gaps left from March 1 activating pre-placed buy stops to accelerate advances on speculative fund buying, traders said.

 

Otherwise, futures did not have any fresh news to direct prices, with routine weekly export sales and a quiet news front keeping bullish longer range speculation fueling upward movement.

 

The U.S. Department of Agriculture is scheduled to release its prospective plantings and quarterly grain stocks reports Friday at 7:30 a.m. CDT (1230 GMT). The average estimate of 22 analysts surveyed by Dow Jones Newswires projects 2007 U.S. planting intentions at 69.167 million acres. The estimates ranged from 65.927 million acres to 70.800 million. In a survey of 14 analysts, the average guess for quarterly grain stocks was 1.801 billion bushels from a range of estimates from 1.765 billion to 1.830 billion.

 

In pit trades, Fimat and Shatkin/Arbor each bought 800 May, Fortis bought 700 May, and Rand Financial bought 400 May contracts. Speculative fund buying was estimated at 6,000 lots. Sellers were scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soyoil futures ended higher, soaring to new contract highs once again on speculative fund buying. Rising crude oil prices have rekindled bullish enthusiasm for soyoil, due to its relationship with biodiesel, pushing CBOT soyoil futures to new contract highs and record open interest levels, analysts said. Biodiesel optimism remains the underlying supportive theme, with strength of petroleum oil prices reigniting confidence in the idea that usage of soyoil for biodiesel will increase, said Anne Frick, senior oilseed analyst with Prudential Financial in New York. The most-active CBOT May soyoil future rallied to a new intraday and contract high of 33.00 cents per pound Thursday, the highest level for a nearby contract on continuation charts since May 2004.

 

Soymeal futures ended mostly higher, feeding off the bullish momentum generated from the rest of the soy complex. However, soyoil/soymeal spreading kept a lid on the market's upside potential, with speculative funds active buyers in soyoil futures, analysts said.

 

May oil share ended at 43.01% and the May crush ended at 65 3/4 cents.

 

In soymeal trades, buyers and sellers were widely scattered among various commission houses, commercials reported as net buyers on the day.

 

In soyoil trades, JP Morgan bought 900 May and 300 July contracts, Tenco bought 400 May and 300 July, and Fimat and Rand Financial each bought 400 July contracts. Speculative fund buying was estimated between 6,000 and 7,000 lots. Sellers were scattered among various commission houses.