April 14, 2007

 

CBOT Soy Review on Friday: Mixed, spillover strength versus acres

 

 

Chicago Board of Trade soybean futures ended mixed Friday, as spillover strength from other markets offset the bearish influence of increased soy acreage potential, analysts said.

 

May soybeans ended 1/4-cent lower at US$7.38, July soybeans settled 1 1/2-cent lower at US$7.55, and November soybeans finished 3/4 cents lower at US$7.83 3/4. May soymeal settled US$1.60 lower at US$199.30 per short tonne. May soyoil ended 32 points higher at 32.97 cents a pound.

 

The markets action was reflective of weather uncertainties and potential for more soybean acres, while spillover strength from neighboring grain futures attracted speculative buying, said Jack Scoville, analyst with the Price Futures Group in Chicago.

 

The market tested both sides of unchanged levels during the day, with corn/soybean spreading firmly planting new crop futures in negative territory for parts of the day. Bearish supply side fundamentals weighed on nearby contracts, with pressure from record South American production and abundant U.S. inventories serving as the downside catalyst, analysts said.

 

However, the market managed to absorb the losses, finding support from sharply higher price moves in neighboring grains, new contract highs in soyoil futures and technical buying amid the contract's ability to hold underlying support, analysts added.

 

On tap for Monday, the National Oilseed Processors Association's report on the March soybean crush is scheduled to be released at 8:30 a.m. EDT (1230 GMT). NOPA's monthly soybean crush report is expected to increase to about 144.2 million bushels from the previous report, according to a survey of industry analysts. NOPA soyoil stocks in March is expected to decline by 24 million pounds to 2.748 billion pounds from the 2.772 billion reported in February. Estimates ranged from as low as 2.684 billion pounds to as high as 2.834 billion pounds.

 

In pit trades, Tenco bought 1,000 May, Fimat bought 300 May, and RJ O'Brien bought 500 May. Sellers were scattered among various commission houses. Speculative funds were net buyers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed once again, with the recurring theme of soy garnering product share featured. Soyoil futures rallied to new contract highs, buoyed by spillover support from Malaysian palm oil and strength in energy futures. The bull market in palm oil futures is the underpinning theme in soyoil, with concerns over tightening palm oil stocks potentially leading to demand for soyoil, attracted speculative buyers, said Anne Frick senior oilseed analyst with Prudential Financial in New York. In addition, there is nothing technical at this point to chase longs for the market, Frick added.

 

Soymeal futures ended lower, succumbing to oil/meal spreading once again, with technical weakness a feature as well. The ability of nearby May futures to penetrate support at the US$200.00 per short tonne level, uncover sell stops to firmly plant futures in negative territory, traders said.

 

May oil share ended at 45.27% and the May crush ended at 63 1/4 cents.

 

In soyoil trades, Bunge Chicago bought 1,000 May, JP Morgan bought 500 May, 500 July and 500 December, Tenco bought 500 may and 300 December. Fimat bought 400 May. Speculative funds were estimated buyers of between 4,000 and 5,000 contracts. Sellers were scattered among various firms with JP Morgan a seller of 500 May, 300 July, and 300 December.

 

In soymeal trades, buyers were scattered among various commission houses. Bunge Chicago sold 400 December, Tenco sold 500 December and Fimat sold 300 May. Speculative funds were estimated sellers of 300 May.