May 22, 2008

 

CBOT Soy Review on Wednesday: Beans rally; soyoil leads on crude oil spike

 

 

Chicago Board of Trade soybean futures ended Wednesday's session higher, rallying on speculative-led buying amid bullish outside market influences and soaring soyoil futures, analysts said.

 

July soybeans settled 17 1/2 cents higher at US$13.49 and November soybeans ended 29 1/4 cents higher at US$13.55. July soymeal settled US$1.00 lower at US$332.30 per short tonne. July soyoil finished 222 points higher at 63.25 cents per pound.

 

The market was buoyed by the spike in crude oil prices above the US$130 a barrel level, with inflationary based buying firmly underpinning prices, analysts said.

 

The crude oil influence catapulted soyoil futures, and the impact spilled over into soybeans, traders said.

 

The impact of outside markets was the dominant feature of the day, and that created a disparity in the oil/meal spread relationship, said Anne Frick, senior oilseed analyst with Prudential Bache in New York.

 

If the gains were tied to weather or a production issue, then soymeal would have rallied in step with soybeans, she added.

 

Meanwhile, soybeans also benefitting from ideas world importers remain hesitant to commit to new purchases from Argentina amid its strike uncertainties and that could lead to increased demand for U.S. origins, a CBOT trader said.

 

Talk of favorable planting conditions for the rapid completion of corn seedings possible leading to additional corn acres at the expense of soybeans enticed traders into adding some risk premium to prices as well, he added.

 

The Census Bureau's crush report is scheduled for release Thursday at 8 a.m. EDT (1200 GMT) U.S. soybean crush for April is expected to be 146 million bushels in the U.S. Census Bureau's monthly report, down from the March crush figure of 152.6 million bushels. April soymeal stocks are seen declining to 352,500 short tonnes, down from the 395,400 tonnes reported for March. Soyoil stocks are seen declining to 2.755 billion pounds in the report, down from 2.897 billion the previous month.

 

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 175,000 to 450,000 metric tonnes. Soymeal sales are projected in a range of 75,000 to 125,000 metric tonnes, with soyoil sales expected in a 5,000- to 25,000-tonne range.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil soaring to 5-week highs on the back of a surge in crude oil futures to a new record high above US$130 a barrel, analysts said. Soyoil was influenced by the gains in petroleum oil, as the bullish price relationship of crude oil and biofuels uncovered speculative buying, traders said. The ability of July soyoil to breach overhead chart resistance at recent highs provided additional momentum to keep sellers on the run, traders added.

 

Soymeal futures finished mixed, with nearby contracts stumbling on oil/meal spreading, analysts said. Inflationary based buying provided underlying support for meal, but with crude oil carrying soyoil higher, meal continued to lose product share on the spread adjustments, analysts added.

 

July oil share ended at 48.75% and the July crush ended at 78 1/4 cents.

 

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

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,500 lots.