April 4, 2008

 

CBOT Soy Review on Thursday: Higher; extends consolidative bounce

 

 

Chicago Board of Trade soybean futures ended higher Thursday, continuing their consolidative bounce from prior losses as the market transitions after the jolt of unexpected planting and stocks data released Monday.

 

May soybeans settled 14 cents higher at US$12.57, July soybeans finished 16 1/2 cents higher at US$12.76 and November soybeans ended 25 1/2 cents higher at US$11.95 1/4. May soymeal settled US$2.20 higher at US$333.20 per short tonne. May soyoil finished 32 points higher at 52.37 cents per pound.

 

The market is trying to get its legs back underneath it, whipsawing in consolidative trade as it lacked any fresh news to sink its teeth into, said John Kleist, independent ag analyst with Kleist Ag Consulting.

 

Technically inspired buying was featured after a choppy, two-sided start, as the market is perceived to have set its near-term lows, effectively adjusted to outlooks for increased plantings and nearby supplies, analysts said.

 

Spreading played a key role in shaping price direction as well, with the unwinding of corn/bean spreads featured, analysts said. Talk of the need for soybeans to rise in an effort to realign the soy/corn spread ratio to limit the amount of acres that will shift back to corn on recent price adjustments supported prices, analysts added.

 

Meanwhile, old-/new-crop spreading was dominant as well, with a 50% decline in export sales from the previous week and the uncertainties of new-crop fundamentals allowing deferred months to gain on nearby contracts, said Kleist.

 

Looking ahead, the market is seen continuing its consolidation theme, as traders await fresh news and concrete evidence of planting intentions in the Midwest, he added.

 

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 ended higher in unison with soybeans.

 

Soyoil futures were buoyed by supportive weekly export sales data, a downward revision in the Census Bureau's February soyoil stocks estimate and the ability of active contracts to climb above overhead resistance levels, analysts said.

 

Soymeal futures ended higher, but managed to lose some product share to soyoil on spreads. A 43% drop in weekly export sales from the previous week and the inability of nearby contracts to pierce through overhead resistance capped upside movement, analysts added.

 

May oil share ended at 45.38% and the May crush ended at 85 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.