June 7, 2008
CBOT Soy Review on Friday: Beans, soyoil rise; speculative buys, bullish influences
Chicago Board of Trade soybean futures ended higher Friday, rising on spillover support from soaring crude oil prices, supportive demand outlooks and bullish weather forecasts.
July soybeans settled 5 1/2 cents higher at US$14.57 1/2 and November soybeans ended 7 1/2 cents higher at US$14.39 1/2. July soymeal settled US$0.50 lower at US$373.00 per short tonne. July soyoil finished 169 points higher at 64.34 cents per pound.
The market picked up where it left off Thursday, with surging energy prices, and shifting export demand from Argentina to the U.S. due to the prolonged farmer's strike in Argentina, buoyed old crop contracts, analysts said.
New crop futures benefitted from heavy Midwest showers that are seen slowing the final stages of U.S. soybean seedings, analysts added.
With a tight projected soybean balance sheet for old and new crop futures, the market is very sensitive to thoughts of lower yields or smaller acreage, so with rains threatening plantings, the market added some premium, a CBOT floor analyst said.
The crop is nearing preventive planting dates, where farmers will start weighing the risks of lower yields versus taking insurance payments on the crop, he added.
The market soared to three-month highs, targeting contract highs, before fund buying slowed and profit taking surfaced to trim advances down the stretch, traders said.
The DTN Meteorlogix Weather forecast said into the weekend, more storms and 1.5 inches of rain are expected in northern Midwest areas. Temperatures will fluctuate with warmer temperatures Saturday, before dropping Sunday. The eastern Midwest will likely see up to an inch of rain and locally heavier in central and northern areas Saturday. The pace of storms may pick up Sunday or Sunday night, according to DTN Meteorlogix. Temperatures will be high, possibly into the low 90s Fahrenheit until Monday, when conditions are expected to cool somewhat.
Meanwhile, lower projected old- and new-crop U.S. soybean ending stocks are expected when the U.S. Department of Agriculture releases June supply and demand tables, with a strong export and crush pace seen tightening the 2007-08 balance sheet. The report is scheduled to be released Tuesday at 8:30 a.m. EDT (1230 GMT).
The average of analysts' estimates peg 2007-08 U.S. soybean ending stocks at 134 million bushels, down 11 million from May's forecast. The estimates ranged between 101 million and 145 million bushels. The average of analyst estimates pegged 2008-09 marketing year ending stocks at 180 million bushels, down from the May forecast of 185 million bushels. The estimates ranged from 141 million to 285 million bushels.
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 soyoil soaring to 3-month highs on the bullish influence of a record high rise in crude oil prices, analysts said. The biofuel component of soyoil continues to keep the market following the movements of crude oil, analysts said. Crude oil spiked to a new record above US$139.00 a barrel and with speculative money flow and technical buying featured futures were easily propelled higher, analysts added.
Meanwhile, soymeal futures backpedaled down the stretch, setting back from an early climb to 3-month highs. End of the week profit taking, and oil/meal spreading served as the catalyst to trigger the slide, traders said. Nevertheless, the markets losses were limited by solid underlying demand, as the lingering Argentina strike continues to buoy U.S. export demand, traders added.
July oil share ended at 46.31% 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 1,000 lots.
In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.
