May 14, 2008

 

CBOT Soy Review on Tuesday: Soar; helped by demand, acreage, crude spike

 

 

Chicago Board of Trade soybean futures ended sharply higher Tuesday, climbing near three-week highs on bullish demand outlooks, supportive acreage prospects and a spike in crude oil prices.

 

May soybeans settled 39 1/2 cents higher at US$13.74 1/2, July soybeans finished 37 cents higher at US$13.79 1/2, and November soybeans ended 36 1/2 cents higher at US$13.25 3/4. July soymeal settled US$11.70 higher at US$350.20 per short tonne. July soyoil finished 82 points higher at 62.10 cents per pound.

 

Speculation that the Argentine farmers' strike will be expanded beyond Thursday and divert some export demand to U.S. shores coupled with ideas a break in Midwest weather will allow corn seedings to progress and limit acreage shifts sparked upside movement, said Dan Basse, president AgResource Company in Chicago.

 

Spillover support from a bounce in crude oil futures helped bolster bullish momentum as well, traders said. Technically motivated speculative buying was featured in late action, with advances accelerating once futures challenged recent highs, traders added.

 

Overall activity was rather subdued for most of the day, before a late surge to record highs in crude oil futures attracted buyers, pushing prices to session highs heading into the close, a CBOT floor broker said.

 

Looking ahead, traders anticipate the market will remain firmly underpinned amid tight projected ending stocks and acreage uncertainties enticing traders to keep risk premium in prices, he added.

 

On tap for Wednesday, the National Oilseed Processors Association's monthly soybean crush report on the April soybean crush is scheduled to be released Wednesday at 8:30 a.m. EDT.

 

Soybean crush rates for April are expected to decline to 142.6 million bushels, according to a survey of industry analysts. Meanwhile, industry analysts are looking for a downward deviation in soyoil stocks from the previous month. NOPA soyoil stocks in April are expected to decline to 2.366 billion pounds.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying was estimated at 4,000 lots.

 

 

Soy Products

 

Soy product futures soared in unison with soybeans. Soyoil futures climbed on spillover support from soybeans, with a surge in crude oil prices attracting speculative-led buying, analysts said.

 

Soymeal climbed to two-week highs on spillover support from soybeans and underlying demand. The market managed to regain some product share on the realigning oil/meal spreads, traders said. The active July contract was capped by overhead resistance near the contract's 50-day moving average, traders added.

 

July oil share ended at 47.00%, and the July crush ended at 73 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 3,000 lots.