May 12, 2007

 

CBOT Soy Review on Friday: Up sharply on tight '07-08 stocks estimate

 

 

Of DOW JONES NEWSWIRES CHICAGO (Dow Jones)--Chicago Board of Trade soybean futures rallied Friday after the U.S. Department of Agriculture pegged 2007-08 ending stocks below trade expectations, analysts said.

 

July soybeans rose 15 1/2 cents to US$7.61 3/4 per bushel, November soybeans climbed 15 1/4 cents to US$7.90 3/4. July soyoil finished up 67 points to 34.39 cents per pound, and July soymeal ended up US$2.90 at US$201.80 per short tonne.

 

The USDA's data was supportive for soybeans as the agency's first look at the new-crop balance sheet cut ending stocks nearly in half from record 2006-07 carryout projections, analysts said. New-crop ending stocks were pegged at 320 million bushels, below the average analyst estimate of 337 million and the USDA's latest old-crop estimated of 610 million.

 

"When you look at the 300 million carryout, it says, 'Well we don't have a lot of room in here to have a lot of problems with the crop," said Dale Durchholz, analyst with AgriVisor Services.

 

Stocks in the new crop year are expected to be nearly 50% lower than in the current year, so consequently "the burdensome supply situation in 2006 turns into a tight supply situation next year, "added Don Roose, president of U.S. Commodities.

 

The USDA projected U.S. oilseed output for 2007-08 at 84.1 million tonnes, down 13% from 2006-07. Lower soybean production, mainly due to "sharply lower" planted area, accounts for most of the reduction, the USDA said.

 

Heavy fund buying, along with strong gains in the neighboring CBOT corn and wheat markets, contributed to the bullish tonnee of the day session, traders said. Commodity funds bought an estimated 11,000 contracts.

 

In pit trades JP Morgan bought 1,000 November, While Rand Financial bought 1,000 July. Shatkin Arbor bought 500 November, and ADM bought 400 July. Term Commodities sold 1,500 July and 500 November, while Tenco sold 400 November.

 

Strong demand for biodiesel also was supportive for soybeans, Durchholz said.

 

"It's not only something going on here in the U.S.," he said about the strong biodiesel demand. Vegetable oil "prices out in the world have been generally strong as well."

 

Soybean crush rates for April in the National Oilseed Processors Association's monthly soybean crush report are expected to decline to about 137.1 million bushels from the previous report, according to a survey of industry analysts.

 

NOPA's report on the April soybean crush is scheduled to be released Monday at 8:30 a.m. EDT.

 

Estimates for the report ranged from as low as 135.0 million bushels to as high as 143.0 million bushels. In the previous report, crush for the month of March was measured at 147.991 million bushels. Analysts said the crush would decline by 10 million bushels in the April report.

 

In other news, Asian soybean rust has been found outside Florida for the first time since the Deep South was struck by a record-breaking Easter weekend frost. It was detected Tuesday in a weed patch west of New Orleans, La.

 

Heavy rains, conducive to development of the moisture-loving plant fungus, fell across Louisiana last weekend.

 

 

SOY PRODUCTS

 

Strong demand for biodiesel, along with the rally in soybeans, pushed CBOT soy product futures higher, analysts said. Fund buying of 2,500 soymeal contracts and 3,000 soyoil contracts pushed prices higher, traders added

 

The USDA pegged 2007-08 soyoil ending stocks at 2.179 billion pounds, down from its latest 2006-07 stocks estimate of 2.954 billion.

 

In soyoil pit trades, Tenco bought 500 December, and JP Morgan bought 400 December. Fimat and UBS each bought 500 July. In soymeal trades, RJ O'Brien and Rand Financial each bought 500 December. Fimat sold 400 July.