April 3, 2004

 

 

CBOT Soy Review On Friday: Meal, Speculation Buying Help Beans Post New Gains

 

Soybean futures at the Chicago Board of Trade posted solid gains again Friday going into the close on mostly technical momentum extending from Thursday's comeback and on the back of the soymeal market.

   

Fresh bullish fundamentals were absent throughout the day, leaving the market to the mercy of speculative interests.

   

"There's not a lot of news, but the market obviously doesn't need a lot of news as long as there's nothing bearish," a longtime Chicago grain trader said.

   

May soybeans settled 16 cents higher at $10.45 1/2 a bushel, and Jly beans were 16 1/2c higher at $10.43 3/4 a bushel. May soymeal finished $6.60 higher at $336.00 a short ton, and May soyoil ended 13 points lower at 32.64c a pound.

   

Traders and analysts said while speculative action was the theme for the day, most of the strength was emanating from the soymeal pit. "The whole soy complex was totally led by meal," a broker on the trading floor said.

   

All the while, market participants said the underlying fundamentals of tight soybean stocks in the U.S. continue to call on the market to ration demand.

   

Meanwhile, forecasts call for southern Brazil to have shower activity early Saturday with 50% to 65% coverage and 0.20 to 0.75 inch of rain with Rio Grand do Sul experiencing the heaviest rains, Global Weather Services said. Argentina is expected to have dry weather into early next week, followed by rains of 0.75 inch and 60% to 75% coverage.

   

In the cash market, soybean premiums fell 2c throughout the day at the Louisiana Gulf, dropping to 30c over the CBOT May contract for April delivery.

   

In CBOT soybeans, Archer Daniels Midland bought 100 Jly and 300 May, Cargill bought 300 Jly, FCStone bought 200 Jly, Produce Grain bought 400 Jly, Term Commodities bought 700 Jly, ABN AMRO bought 300 Jly, Goldenberg Hehmeyer bought 200 May and 200 Jly, and Shatkin Arbor Karlov bought 300 Jly.

   

Sellers were Cargill with 200 May, Rand Financial with 300 May, and Citigroup Global Markets with 300 May.

   

Cargill Investor Services spread 700 May/Jly, FCStone spread 500 Jly/May, Rand Financial spread 1,000 Jly/May, Shatkin Arbor Karlov spread 1,200

Jly/May, R.J. O'Brien spread 1,000 Jly/May, Fimat spread 600 May/Jly, FCStone spread 600 May/Jly, and Archer Daniels Midland spread 500 May/Jly.

 

SOY PRODUCTS

 

Soymeal was the source of inspiration for the soybeans as the May contract rallied to a new high of $337.00 a short ton with a 2% increase in value.

   

"The funds are forcing the users into the market," one products trader explained. "They keep pushing it up and the users can't wait. They just have to buy it."

   

Meanwhile, as the funds pile longs into the meal, May soyoil suffered a 0.40% loss, pulling oil share down sharply to 32.69%. May crush ended at 52 3/4c.

   

In soymeal trades, Cargill bought 200 May and 100 Aug, Fimat bought 500 Jly, R.J. O'Brien bought 200 Jly and 300 May, and Citigroup Global Markets bought 100 Jly and 200 May. Cargill Investor Services sold 100 Dec, 200 May and 200 Jly, Iowa Grain sold 200 Jly, Rand Financial sold 200 May and 100 Aug, and Refco sold 300 May and 100 Jly.

   

In soyoil, Produce Grain bought 200 May, 400 Jly and 100 Aug, Iowa Grain bought 300 May, and R.J. O'Brien bought 400 Jly. Archer Daniels Midland sold 200 May, Fimat sold 400 May, Man Financial sold 300 May and 1,300 Jly, and Refco and Shatkin Arbor Karlov both sold 200 May.