May 1, 2007

  

CBOT Soy Review on Monday: Climb on spread unwind; eyes corn plantings

  

 

Chicago Board of Trade soybean futures ended higher Monday, buoyed by the unwinding of long corn and short soybean spreads amid an open window of weather for Midwestern farmers to plant corn this week.

 

July soybeans settled 4 1/2 cents higher at US$7.43, and November soybeans finished 4 1/4 cents higher at US$7.70 3/4. July soymeal settled US$0.60 higher at US$198.80 per short tonne. July soyoil ended 32 points higher at 33.77 cents a pound.

 

The window for rapid corn plantings is open this week and the warm, dry forecast rekindled the market's mindset that the March 30 plantings report figure could be reality if the weather remains favorable for producer seedings for the rest of the week, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The forecast encouraged participants to unwind corn/soybean spreads, with spillover support from new contract highs in soyoil lending price strength to nearby, old-crop soybean futures, traders added.

 

Otherwise, activity was relatively quiet with a higher-than-expected weekly export inspections figure providing mild support amid ideas U.S. prices remain competitive with supplies from South American origins, analysts added.

 

The DTN Meteorlogix weather forecast calls for a generally dry and warm weather pattern across the Midwest during this week. Conditions will be favorable for corn planting. This outlook follows a weekend of warm temperatures that allowed many fields to dry out and planting to resume in the Midwest. Temperatures will turn cooler after record or near-record heat in the upper 80s to lower 90s Fahrenheit during the past weekend; however, values will still be normal to above normal across the region.

 

USDA reported 14.935 million bushels of soybeans were inspected for export in the week ended April 26. The export figure is up 4.9% from the previous week's 14.242 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 8 million to 14 million bushels. Accumulated soy inspections total 925.610 million bushels, up 23% from the 752.343 million bushels reported at the same time last year.

 

USDA is scheduled to release its weekly crop progress report at 4 p.m. EDT.

 

In pit trades, buyers and sellers were widely scattered among various commission houses, with Fimat a featured buyer of 1,400 July. Speculative fund buying was estimated between at 5,000 contracts.

 

 

SOY PRODUCTS

  

Soy product futures ended mostly higher, with soyoil the upside leader on speculative buying. Soyoil futures rallied to new contract highs on a fund-sponsored rally, with a technically strong market and bullish long-range global vegoil demand outlooks underpinning prices, said Brian Hoops, an analyst with Midwest Market Solutions.

 

Soymeal futures ended mostly higher, but lost product share amid price strength in soyoil. Soymeal was a follower, benefiting from strength in the rest of the soy complex, as speculative interest and fundamental strength are centered on soyoil, analysts said.

 

July oil share ended at 45.93% and the July crush ended at 65 3/4 cents.

 

In soyoil trades, UBS Securities bought 1,500 July and 300 December, Fimat bought 700 July, Rand Financial bought 800 July and JP Morgan bought 400 May and 400 July. Bunge Chicago sold 800 July, Tenco sold 500 July, Fimat sold 500 July and Rand Financial sold 600 July.

 

In soymeal trades, buyers and sellers were scattered among various commission houses with speculative fund buying estimated at 2,000 contracts.