May 24, 2008

 

CBOT Soy Review on Friday: Rallies, adding premium on demand, outsides

 

 

Chicago Board of Trade soybean futures ended sharply higher Friday, soaring on bullish psychology associated with demand from Argentine strife, technical buying and spillover support from outside market influences.

 

July soybeans settled 43 1/4 cents higher at US$13.68 and November soybeans ended 29 1/4 cents higher at US$13.53 1/2. July soymeal settled US$8.60 higher at US$336.60 per short tonne. July soyoil finished 173 points higher at 63.56 cents per pound.

 

The rise in crude oil prices and weaker U.S. dollar kick started the bullish theme, with technical buying following suit to catapult nearby futures to new highs for the week, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

Bull spreading allowed old crop contracts to gain on deferred months amid fears prolonged disputes between Argentine farmers and the government will continue to divert export business to U.S. shores, Hoops added.

 

Underlying concerns that heavy rains forecasted to move through Iowa, the Dakotas and Minnesota during the weekend could further delay seedings and emergence enticed traders to add risk premium to prices, analysts said.

 

Otherwise, technical buying was featured, with the ability of the July contract to fill a chart gap up to US$13.66 uncovering pre-placed buy orders, analysts added. The market effectively added premium in the face of uncertainties in Argentina, plantings and weather heading into an extended holiday weekend.

 

Nevertheless, the market continues to hover within a wide near term trading range, with traders anticipating the theme will continue until fresh definitive fundamental news arises, a CBOT floor broker said.

 

CBOT markets will be closed Monday in observance of the Memorial Day holiday.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures bounced higher in unison with soybeans. Soyoil futures were buoyed by the strength in crude oil amid its biofuel relationship with petroleum, analysts said. Technically inspired buying helped extend the advances, with the ability of the July contract to breach overhead resistance at the April high catapulting prices to 10-week highs, traders said.

 

Soymeal futures rallied higher, feeding off the bullish theme in the soycomplex, garnering strength from ideas Argentina's farmer strike issues will continue to bolster global demand for U.S. soymeal, analysts said. Meanwhile, oil/meal spreading remained a minor hindrance to meal's upside advances, traders added.

 

July oil share ended at 48.56% and the July crush ended at 71 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 buying estimated at 4,000 lots.