April 5, 2008

 

CBOT Soy Review on Friday: Rises on technical buys, spillover, fundamentals

 

 

Chicago Board of Trade soybean futures finished higher Friday, extending the market's recovery from prior losses on supportive fundamental outlooks, spillover from outside markets and technically inspired buying.

 

May soybeans settled 20 cents higher at US$12.77, July soybeans finished 18 cents higher at US$12.94 and November soybeans ended 28 1/2 cents higher at US$12.23 3/4. May soy meal settled US$0.30 higher at US$333.50 per short tonne. May soy oil finished 124 points higher at 56.61 cents per pound.

 

Futures completed a full retracement of losses earlier in the week after the steep setback in prices on bearish stocks and acres data, analysts said.

 

The market had formed a classic near-term bottom on technical charts, opening the door for futures to work their way back into a trading range, said Bill Nelson, grains analyst with Wachovia Securities in St. Louis, Mo.

 

Futures enjoyed the friendly background of supportive outside inflationary markets, with higher energy prices and weakness in the U.S. dollar lending support to attract speculative buyers, Nelson added.

 

Meanwhile, general assumptions that strong export and domestic demand will offset any residual bearish adjustments in next week's U.S. soy balance sheet revisions following higher-than-expected quarterly stocks served as a fundamental boost to lure buyers to the market as well, analysts said.

 

The realignment of relationships in the soy/corn spread ratio aided prices also, as soybeans rallied to provide late economic incentives that will sustain prospective acreage increases, analysts added.

 

Technical factors were key in the advances, with the ability of active contracts to fill overhead chart gaps and moving average resistance uncovering pre-placed buy orders, traders said.

 

Looking ahead, traders anticipate prices will continue to climb into a trading range, targeting overhead resistance levels ahead of Wednesday's supply and demand report, analysts said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,500 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soy oil leading the gains, extending their recovery from recent losses. Soy oil futures satisfied near-term technical objectives, fully recovering chart losses from earlier in the week, analysts said. Technical buying was featured, with higher energy prices and weakness in the U.S. dollar attracting fresh speculative buying as well, analysts added.

 

Soy meal futures followed the rest of the complex higher but lost ground to soy oil on spreads, with old/new crop spreading featured as well, traders said.

 

May oil share ended at 45.91% and the May crush ended at 79 cents.

 

In soy meal trades, buyers and sellers were scattered among various commission houses.

 

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