May 15, 2008

 

CBOT Soy Review on Wednesday: Mostly higher; new crop leads soybeans

 

 

Chicago Board of Trade soybean futures ended mostly higher Wednesday, led by new-crop contracts as traders added risk premium amid concerns over 2008 acreage.

 

July soybeans settled unchanged at US$13.79 1/2 and November soybeans ended 7 1/4 cents higher at US$13.33. July soymeal settled US$1.50 higher at US$351.70 per short tonne. July soyoil finished 60 points lower at 61.50 cents per pound.

 

New-crop soybeans rallied to two-month highs, bolstered by bullish fundamentals surrounding the potential for less 2008 soybean acreage, analysts said.

 

A better planting outlook for the corn crop is seen rapidly expanding the corn seeding pace in the next week, and that should limit any acreage shifting from corn to soybeans, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

With winter wheat crop development behind schedule, the winter wheat harvest could be delayed and that may force some late planting of double-crop soybeans, raising the risk for reduced yields, Hoops added.

 

The combination of the acreage worries served as the catalyst for the gains, with old-crop futures continuing to garner strength from demand outlooks amid talk of Argentine strike issues forcing some export business to U.S. origins, analysts added.

 

Old-crop contracts were supported by demand associated with the Argentine strike and tight projected ending stocks, but with the news factored into prices previously coupled with the bearish influence a firm U.S. dollar and weaker energy prices, gains in nearby contracts were limited, traders said.

 

Meanwhile, Argentine grain exporters have begun to declare force majeure on shipments because of an ongoing farm strike, an executive at a top export company told Dow Jones Newswires on Wednesday. Analysts expect a wave of export contract defaults next week as grain stocks dwindle.

 

The strikers are focusing on shutting down grain exports with about 200 roadblocks across the country preventing delivery to the numerous grain processing and export complexes that line the Parana River, analysts said.

 

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 75,000 to 250,000 metric tonnes. Soymeal sales are projected in a range of 50,000 to 150,000 metric tonnes, with soy oil sales expected in a 5,000- to 10,000-tonne range.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil stumbling lower on the unwinding of oil/meal spreads and the bearish influence of energy futures, analysts said. Soymeal futures ended higher, climbing to three-week highs, on a lot of spread unwinding and technically inspired buying, analysts added. Meal followed soybean higher, with solid underlying demand helping futures grab product share from soyoil, traders say.

 

July oil share ended at 46.65% and the July crush ended at 70 3/4 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 selling estimated at 2,000 lots.