May 1, 2008

 

CBOT Soy Review on Wednesday: Settle higher; Argentina talk sparks rally

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, rallying from earlier losses on Argentine strike uncertainty, end-of-month positioning and technical buying.

 

May soybeans settled 22 1/4 cents higher at US$13.01 3/4, July soybeans finished 20 1/2 cents higher at US$13.14 and November soybeans ended 25 cents higher at US$12.25 1/2. July soymeal settled US$9.20 higher at US$342.20 per short tonne. July soyoil finished 51 points higher at 58.33 cents per pound.

 

Perceptions that negotiations between the Argentine government and farmers were not progressing well sent bullish ripples through the market, with futures soaring to session highs at midday, analysts said.

 

The market is very jittery when it comes to the Argentine strike amid the demand implications it has on already tight projected U.S. inventories, analysts added.

 

Technically inspired buying accelerated the advances, with the ability of the market to push above near-term overhead resistance levels uncovering pre-placed buy stop orders, traders said. End-of-the-month position evening helped sustain the bullish theme, with speculative short covering emerging on the price bounce, traders added.

 

Talk of a noted commercial firm buying back deliverable receipts in the markets provided another boost to keep prices underpinned as well, a cash-connected CBOT broker said.

 

However, the market ended well off the midday gains, succumbing to end-of-the-session profit-taking as Argentine rumors were downplayed amid reports the government and farmer groups were back at the negotiating table, analysts added.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.

 

On tap Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Trade estimates put soybean export sales at 200,000 to 450,000 metric tonnes. Soymeal sales are projected in a range of 100,000 to 200,000 metric tonnes, with soy oil sales expected in a 5,000- to 15,000-tonne range.

 

 

SOY PRODUCTS

 

Soy product futures rallied in unison with soybeans, with soyoil feeding off spillover support from higher overnight values in world vegoil markets and a midday bounce in crude oil futures off session lows, analysts said.

 

Soymeal futures soared in step with soybeans, garnering strength from technical buying and the bullish theme generated from Argentina uncertainties, traders said.

 

However, futures pulled off the highs, as technical resistance at the July contract's 50-day moving average capped upside potential, traders added.

 

July oil share ended at 46.01% and the July crush ended at 80 1/2 cents.

 

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

 

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