April 28, 2007

 

CBOT Soy Review on Friday: Soybeans firmer, products mixed

 

 

Soybean futures at the Chicago Board of Trade closed modestly higher Friday, and near mid-range, amid supportive weather developments in the Corn Belt. July soybeans did close at the weekly high close, and that's a positive for the bulls heading into the new trading week next week.

 

July soybeans closed up 3 1/2 cents a bushel, at US$7.38 1/2. New-crop November soybeans closed up 4 1/4 cents at US$7.66 1/2.

 

Soybeans prices were supported by notions that farmers in the Corn Belt will be able to plant corn in the coming days, due to drier and warmer conditions, said Victor Lespinasse, a longtime grains analyst with A.G. Edwards in Chicago. This follows a period of cool and rainy weather in the Corn Belt that has caused significant planting delays for corn, and had bolstered notions that farmers would switch acres back to soybean due to the corn planting delays.

 

Still, buying interest in soybean futures was limited Friday on talk that even though corn planters will start to roll in the Corn Belt this weekend, overall corn planting progress is still behind average and is likely to remain that way. This would argue that there will still be some intended corn acres that will switch back to soybeans. Traders are already beginning to discuss acreage numbers for the June 29 USDA acreage report. The consensus is that corn acres will not be as high as depicted in the March 30 USDA planting intentions report, due to the less-than-ideas springtime weather in the Corn Belt.

 

There was light fund buying seen in the soybean pit today. Light buy stops were also uncovered on the push above previous chart resistance at the US$7.40 level in July futures.

 

Technically, the weekly high close in soybeans is positive for price action Monday. Chart resistance for July soybeans is seen at Friday's high of US$7.42 and then at US$7.45. Support is seen at Friday's low of US$7.34 and then at US$7.30.

 

Bears do point out that July soybeans are still in a two-month-old price downtrend from the late-February high. Bulls would not gain fresh upside technical momentum until they push and close prices above the US$7.50 level in July futures.

 

 

SOY PRODUCTS

 

July soybean oil closed up 70 points at 33.45 cents Friday. Prices closed nearer the session high and at the weekly high close. That's bullish heading into the new trading week next week.

 

A floor analyst said fresh fund buying was seen in bean oil, amid higher "outside markets" like crude oil and gold.

 

Technical resistance for July bean oil is located at Friday's high of 33.60 cents and then at the contract high of 33.84 cents. Support is seen at 33.20 cents and then at 33.00 cents.

 

July soybean meal futures closed down US$1.80 at US$198.20. Prices closed near the session low as spreaders were selling meal and buying soybean oil. That spread trade has been going on for a few weeks now.

 

July meal finds technical resistance at Friday's high of US$200.60 and then at this week's high of US$202.70. Chart support is seen at Friday's low of US$198.00 and then at this week's low of US$196.50.