April 21, 2007

 

CBOT Soy Review on Friday: Up on spreads, soyoil, commercial buys

 

 

Chicago Board of Trade soybean futures ended higher Friday, underpinned by intermarket spreads, spillover strength from soyoil and commercial buying.

 

May soybeans ended 5 cents higher at US$7.23 1/4, July soybeans settled 5 1/4 cents higher at US$7.40 1/4, and November soybeans finished 5 1/2 cents higher at US$7.67 1/2. May soymeal settled US$0.50 lower at US$196.40 per short tonne. May soyoil ended 79 points higher at 32.35 cents a pound.

 

The market was buoyed by soybean/corn spreads amid favorable planting windows for corn that lessens the option of more soybean acres, said John Kleist, senior analyst with Top Third Ag Marketing in Chicago.

 

The weather supported new-crop futures, while borrowed strength from soyoil futures and the emergence of commercial buying in the absence of any other motivating fundamental influences kept old-crop months underpinned, analysts added.

 

Overall activity was relatively subdued, with participants taking the opportunity to square up a few positions heading into the weekend, traders said. Technical strength aided the session's gains, with the inability of active contracts to challenge support at the week's lows attracting buyers, traders added.

 

The DTN Meteorlogix weather forecast calls for mostly dry weather west of the Mississippi River through Sunday, and dry weather in the eastern Midwest through most of the day Monday. In addition, temperatures will be in the 70s Fahrenheit, allowing fields to firm up and fieldwork to either begin or continue. Scattered planting is reported in the western Midwest, but areas from the Mississippi on east have been stymied in many cases by very wet ground and persistent ponding of fields.

 

Meanwhile, Sunday into Monday will bring a new round of rain to the western Midwest. A second rainfall system will bring up to 1 1/2 inches of rain to Iowa, eastern Nebraska and Missouri on Tuesday and Wednesday. These rain systems will halt fieldwork progress. In the eastern Midwest, rainfall will hold off until Tuesday, when up to 1 1/2 inches develops over the region. Heaviest rains will fall in the south and east - southern and eastern Illinois, Indiana and Ohio, Meteorlogix forecasts.

 

In pit trades, ADM Investor Services bought 500 May, and JP Morgan and UBS Securities each bought 500 July. Sellers were lightly scattered among various commission houses. Commercial buying was estimated at 1,500 contracts and speculative buying was estimated at 1,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil soaring on technically motivated buying and spillover strength from crude oil futures.

 

Soyoil futures rallied on speculative-led buying, buoyed by a technical recovery from a recent retreat from contract highs, said Kleist. The market had absorbed speculative liquidation on its slide from contract highs, but the funds defended net long positions at major moving average support with crude oil futures strength serving underlying justification for the gains, he added.

 

Soymeal futures ended lower, backpedaling from initial gains. The market stumbled lower, once profit-taking on soyoil/soymeal spreads was exhausted, and speculative buying returned to soyoil futures, analysts said.

 

May oil share ended at 45.16% and the May crush ended at 64 3/4 cents.

 

In soyoil trades, Bunge Chicago bought 2,200 July, Fimat bought 900 May and 400 July, and JP Morgan bought 300 July. JP Morgan sold 800 July and Fimat sold 400 July. Speculative fund buying was estimated at 2,000 contracts. In spreads, Bunge Chicago spread 2,800 December/July.

 

In soymeal trades, buyers and seller was scattered among various commission houses, with JP Morgan and Rand Financial each buying 300 July, while Bunge Chicago sold 300 May and Fimat sold 700 July contracts.