June 5, 2008

 

CBOT Soy Review on Wednesday: Rallies; demand, plantings, technicals buoy

 

 

Chicago Board of Trade soybean futures rallied Wednesday, climbing to multi-week highs on bullish demand outlooks, planting and emergence concerns and technical momentum.

 

July soybeans settled 29 1/2 cents higher at US$13.89 and November soybeans ended 26 cents higher at US$13.79 3/4. July soymeal settled US$13.00 higher at US$360.00 per short tonne. July soyoil finished 57 points lower at 60.47 cents per pound.

 

Prices rose steadily throughout the day, with no drastic movements except for a little boost at the end of the day, analysts said. However, soybeans rode technical momentum past some recent highs, and were supported by rainy weather and forecasts for more rain, analysts added.

 

Meanwhile, the market still remains under the specter of Argentina, as the strike in Argentina continues to be supportive. The strike has caused "very firm" Brazil export prices, which is adding to the strike's effect on prices, a CBOT floor broker said.

 

The increased demand as a result of the Argentine strike in conjunction with solid domestic use is placing increased pressure on already tight projected ending stocks, traders said.

 

New-crop futures spiked on planting concerns, as Midwest rains push back the seeding of the final 18 to 20 million acres of U.S. soybeans that are already behind there average pace for this time of year, a trader added.

 

The new-crop November future set a three-month high on an intraday basis, with all contract months garnering additional strength from technical buying as futures eclipsed near-term overhead resistance levels on technical charts, a CBOT floor broker said.

 

"It appeared funds were re-entering the market late, perhaps encouraged that Tuesday's Commodity Futures Trading Commission announcement wasn't more severe," a trader said.

 

On tap for Thursday, 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 300,000 to 750,000 metric tonnes. Soymeal sales are projected in a range of 75,000 to 175,000 metric tonnes, with soyoil sales expected in a zero- to 10,000-tonne range.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal spiking to six-week highs. Meal was supported by demand outlooks amid the lingering Argentina farmers strike, technical momentum and the unwinding of oil/meal spreads, analysts said.

 

Soyoil futures ended lower, divorced from the supportive tonnee filtering through the rest of the soy complex, as spillover weakness from crude oil futures continued to weigh on prices, analysts added.

 

July oil share ended at 45.65% and the July crush ended at 68 1/4 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 selling estimated at 2,000 lots.