June 8, 2007
CBOT Soy Review on Thursday: Speculative buying lifts prices to new highs
Chicago Board of Trade soybean futures ended higher Thursday, rallying to new highs on rekindled speculative fund buying interest, analysts said.
July soybeans settled 9 3/4 cents higher at US$8.32, and November soybeans finished 11 cents lower at US$8.64 1/2. July soymeal settled US$2.30 higher at US$226.20 per short tonne. July soyoil ended 46 points higher at 36.36 cents a pound.
The return of speculative fund buying reignited bullish enthusiasm, with lingering concerns over dryness in the eastern crop belt, smaller 2007 acreage, and outlooks for a draw down in 2007-08 inventories rekindling buyer interest, said Joe Victor, an analyst with Allendale Inc.
The inability of futures to challenge underlying support levels on a recent profit taking setback gave bullish traders confidence, with supportive long-range supply and demand outlooks remaining an underpinning force to keep sellers on the run, Victor added.
Otherwise, the market had little fresh directives, with a quiet news front keeping traders focused on technical factors for a near-term price influence, analysts said.
New contract highs were established across active contracts, with advances accelerating down the stretch as prices pierced through technical resistance at previous highs, analysts added.
Meanwhile, the DTN Meteorlogix weather forecast calls for temperatures to range from 86 to 94 degrees Fahrenheit east of the Mississippi River Thursday. Strong winds will blow from the southwest as well, leading to moisture-sapping conditions. Temperatures will cool going into the weekend. Moisture in the eastern Midwest will still be hard to find; no more than one-half inch of rain is in store for Indiana and Ohio through the middle of next week.
Farther west, the crop areas of the western Midwest through north-central Illinois have more favorable soil moisture conditions. Additional showers and thunderstorms will bring up to one-half inch of rain to Iowa, southern Minnesota, Wisconsin, and northern Illinois Thursday into Friday.
Next week, the split in rainfall patterns between the western and eastern Midwest will continue. Rainfall will reach normal to above normal totals in the western Midwest, while the eastern Midwest receives normal to below normal amounts. Moisture concerns will continue in the eastern Midwest as a result; however, high-producing Corn Belt areas of Iowa, Minnesota, Nebraska, and Illinois will continue with favorable crop moisture, Meteorlogix forecasts.
In pit trades, Man Financial bought 1,200 July, RJ O'Brien, UBS Securities, and Tenco each bought 500 July contracts, ADM Investor Services and Penson GHCO each bought 400 July, and Kottke bought 500 November. Tenco sold 1,000 July and Citigroup sold 400 July. Speculative fund buying was estimated between 7,000 and 8,000 contracts.
SOY PRODUCTS
Soy product futures ended higher across the board. Soyoil futures led the upward charge, with speculative buying featured, traders said. Overnight strength in world vegoil markets, price gains in energy futures and bullish technical momentum combined to keep buyers in command of direction, analysts said.
Soymeal futures extended to new highs for the current move, rallying to their highest levels since late March. The market fed off the bullish theme filtering through the soy complex, with concerns over a smaller 2007 soybean crop lending support to attract speculative buyers, analysts said.
July oil share ended at 44.53% and the July crush ended at 65 1/4 cents.
In soymeal trades, Fimat bought 600 December, RJ O'Brien and Shatkin/Arbor each bought 300 July. JP Morgan sold 300 July and UBS Securities sold 200 July. Speculative fund buying was estimated at 2,000 lots.
In soyoil trades, JP Morgan bought 800 July, Fimat bought 500 July, with Bunge Chicago, Tenco and UBS Securities each buying 300 July. Citigroup sold 300 August, and Shatkin/Arbor sold 300 July. Speculative fund buying was estimated at near 3,000 contracts.
