May 2, 2007

  

CBOT Soy Review on Tuesday: Rallies on technical momentum, planting concerns

 

 

Chicago Board of Trade soybean futures ended higher Tuesday, buoyed by speculative buying tide to technical strength and concerns over planting delays.

 

July soybeans settled 13 1/4 cents higher at US$7.56 1/4, and November soybeans finished 12 3/4 cents higher at US$7.83 1/2. July soymeal settled US$4.90 higher at US$203.70 per short tonne. July soyoil ended 4 points higher at 33.81 cents a pound.

 

Technical momentum was the driving force behind the day's rally, with buyers encouraged by the market's ability to hold underlying technical support, said John Kleist, senior analyst with Top Third Ag Marketing in Chicago.

 

Rising concerns that soybean plantings are running well behind average similar to corn, attracted buyers as well, with analysts saying many farmers are committed to planting corn and the soybean seeding pace may be pushed back farther, a cash connected CBOT broker said.

 

Nevertheless, the confluence of bullish technicals coming together served as the rallying point for futures, with the absence of any overtly bearish news allowing soybeans the freedom to follow technical nuances, Kleist added.

 

U.S. Department of Agriculture reported Monday in its weekly crop progress report, U.S. soybean plantings at 3% complete. The figure lags behind last year's pace of 9% and the five-year average of 7%.

 

Meanwhile, a slow-moving area of low pressure in central Texas, Gulf of Mexico-origin moisture flowing northward, and a cool front heading southeast from the Northern Plains toward the Great Lakes and Ohio Valley are producing an unsettled weather pattern in the central and eastern Midwest. As a result, the DTN Meteorlogix forecast is turning wetter for the southern half of the Midwest - from central Missouri east through Ohio - during the middle of this week.

 

In pit trades, buyers and sellers were widely scattered among various commission houses, with Rand Financial a buyer of 1,000 July and speculative fund buying estimated at 5,000 contracts.

 

 

SOY PRODUCTS

  

Soy product futures ended higher across the board, with technical strength and spillover from soybeans aiding the higher tone. Soyoil futures ended higher, but lost ground to soymeal on spreads as the market stage a correction in the soyoil/soymeal relationship, said cash connected CBOT broker. Weakness in crude oil futures took some edge off soyoil as well, analysts added.

 

Soymeal futures climbed Tuesday, regaining product share on profit taking on soyoil/soymeal spreads, analysts said. The ability of the most active July contract to hold support at its 200-day moving average attracted speculative buyers to lift prices to 2 week highs, traders added

 

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

 

In soyoil trades, buyers and sellers were widely scattered, with speculative fund buying estimated at 2,000 lots.

 

In soymeal trades, buyers and sellers were widely scattered, with speculative funds estimated as net buyers on the day.