April 23, 2008

 

CBOT Soy Review on Tuesday: Soar as demand, technicals, outsides buoy

 

 

Chicago Board of Trade soybean futures soared to one-week highs Tuesday, rallying on demand, technical buying and outside market influences.

 

May soybeans settled 59 1/4 cents higher at US$13.74 3/4, July soybeans finished 59 cents higher at US$13.89 1/2 and November soybeans ended 41 1/2 cents higher at US$12.77. July soymeal settled US$18.40 higher at US$359.70 per short tonne. July soyoil finished 198 points higher at 61.70 cents per pound.

 

"The soybean market is demand driven, receiving much better exports from China at this time of year," said Dave Marshall, independent market consultant and introducing broker at RJ O'Brien in Nashville, Ill.

 

A good cash basis recovery at the U.S. Gulf of Mexico coupled with ideas of contentious times in Argentina related to a possible resumption of a farmer's strike and the positive impact that will have on U.S. exports buoyed futures, Marshall added.

 

The ability of active contracts to breach key overhead moving average resistance accelerated the price bounce, with weakness in the U.S. dollar, record high crude oil prices and higher metal futures providing a bullish inflationary influence to aid the market's upward theme, analysts said.

 

Strong underlying export demand is offsetting increased old crop inventories reported after the March 31 quarterly stocks report, placing increased pressure on the market to ration some demand, Marshall said. Also, Argentine troubles have world importers looking to the U.S. for the reliability of supplies, he said.

 

Looking ahead, traders anticipate the market will remain firmly underpinned, but any sign of upside exhaustion will uncover profit taking pressure amid the uncertainties of 2008 acreage, a CBOT floor broker said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soyoil futures ended sharply higher, rising on speculative-led buying. The combination of spillover support from soybeans, a record high surge in crude oil futures, technical strength and strong underlying demand served as bullish features to lead futures higher, analysts said.

 

Soymeal futures roared to four-week highs, bolstered by a speculative buying influence. Spillover strength from soybeans, solid underlying demand in feed markets, technical strength and the bullish impact of a weaker U.S. dollar and higher crude oil and metal futures kept speculative buyers enthused, analysts said.

 

July oil share ended at 46.66% and the July crush ended at 77 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 4,000 lots.

 

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