April 15, 2008

 

CBOT Soy Review on Monday: Soars on technical buys, demand, spillover

 

 

Chicago Board of Trade soybean futures ended sharply higher Monday, rising on a combination of technical buying, bullish demand outlooks and spillover support from soyoil futures.

 

May soybeans settled 40 cents higher at US$13.72 1/2, July soybeans finished 40 cents higher at US$13.89 1/4 and November soybeans ended 24 1/2 cents lower at US$12.87. May soymeal settled US$5.70 higher at US$350.20 per short tonne. May soyoil finished 156 points higher at 61.50 cents per pound.

 

The market continued to pursue a recovery from its early April lows, with advances accelerating as prices eclipsed chart resistance at major moving averages, said John Kleist, analyst with Allendale Inc. in McHenry, Ill.

 

The market also garnered support from a weaker U.S. dollar, strength in outside inflationary markets as well as advances in world vegoil prices, Kleist added.

 

Meanwhile, talk of a frost in Argentina hurting the quality of the soybean crop and lingering uncertainties surrounding the possible resumption of a farmer's strike that stifled grain movement in Argentina and forced world importers to shift some demand to the U.S. kept sellers on the sidelines, traders said.

 

However, lower-than-expected crushing data from the National Oilseed Processors Association served as an impediment to upside potential, Kleist said.

 

Otherwise, spreads were featured, with demand and tightening stocks allowing futures to widen the spread between old and new crop contracts, a CBOT trader said. The soybean/corn spread ratio continued to realign as soybeans fight to hold onto projected increases in 2008 acres, he added.

 

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

 

 

SOY PRODUCTS 

 

Soy product futures rallied Monday, with soyoil futures the upside leader of the complex. Soyoil spiked higher, with nearby contracts gapping above key resistance at their 40- and 50-day moving averages, analysts said. Nearby contracts rallied to one-month highs, buoyed by strength in world vegoil markets amid supportive talk of demand from a vegoil conference in Dubai, lower-than-expected stocks data in the NOPA crush report and spillover support from soaring energy prices, analysts added.

 

Soymeal futures were pulled higher with the rest of the soy complex, feeding off supportive outlooks for world feed demand, analysts said.

 

May oil share ended at 46.75%, and the May crush ended at 74 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 4,000 lots.