May 29, 2008

 

CBOT Soy Review on Wednesday: Higher on Argentina concerns, outside markets

 

 

Chicago Board of Trade soybean futures finished higher Wednesday, climbing on lingering disputes in Argentina and supportive outside market influences.

 

July soybeans settled 25 cents higher at US$13.72 3/4 a bushel, and November soybeans ended 16 cents higher at US$13.57 1/4. July soymeal settled US$8.70 higher at US$343.70 per short tonne. July soyoil finished 45 points higher at 62.65 cents per pound.

 

The strike issues in Argentina buoyed prices once again, as traders factor in the potential for increased U.S. export demand, as world end users look for guaranteed coverage amid the instability of moving supplies out of Argentina, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

A rebound in petroleum prices from overnight losses coupled with concerns surrounding planting and emergence rates served as another supportive factor to lift prices in day-session trade, analysts added.

 

Technically inspired buying aided the upward move, with the ability of active contracts to push above recent highs uncovering fresh buying, traders said.

 

The uncertainty of the Argentine strike continues to provide a floor for downside movement, as the market can't underestimate its impact on U.S. soybean and product export demand, said Greg Wagner, analyst with AgResource Company in Chicago.

 

The longer the strike lingers on, the greater the risk is for a demand-rationing rally to emerge, he added.

 

Nevertheless, July prices are still trapped in a sideways trading range between the April high of US$14.15 and the May low of US$12.44. The direction in which prices break out of this trading range is likely to be the next significant trend in prices, a technical analyst said.

 

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 rose in step with advances in soybeans. Soymeal futures were the upside leader of the products, rising on bullish demand potential associated with the lingering political and economic unrest in Argentina resulting from a farmers' strike, analysts said. The unwinding of oil/meal spreads sparked additional gains as well. Technical buying served as a key source of strength down the stretch, with advances accelerating once July prices climbed above major moving averages and filtered into a chart gap left from May 19.

 

Soyoil futures climbed in unison with the rest of the complex, feeding off a bounce in crude oil futures and optimistic demand outlooks resulting from the farmers' strike in Argentina, traders said.

 

July oil share ended at 47.68%, and the July crush ended at 72 1/2 cents.

 

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

 

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