June 13, 2008

 

CBOT Soy Review on Thursday: Climb, bullish fundamentals extend advances

 

 

Chicago Board of Trade soybean futures ended higher Thursday, expanding on Wednesday's limit gains as bullish underlying fundamentals and new crop concerns buoyed prices.

 

July soybeans settled 20 cents higher at US$15.36 1/2 and November soybeans ended 3 1/2 cents higher at US$15.12 1/2. July soymeal settled US$3.70 higher at US$402.20 per short tonne. July soyoil finished 120 points higher at 66.20 cents per pound.

 

Old crop contracts spiked higher once again, supported by market fundamentals pointing to world demand outstripping supply, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

Bull spreads were featured, with profit taking in new crop contracts amid ideas the last of the big Midwest rains will pass by Friday and open up opportunities for late soybean plantings, traders said.

 

Significantly higher soybean prices are seen attracting acres despite lower yield potential from late plantings, with traders saying the market had adequately factored in the weeks' flooding concerns, Hannagan said.

 

The Argentine farmers' strike is effectively still on despite the verbal suspension of the strike, as no grain is moving to Argentina ports yet, analysts added.

 

Futures rose to over three-month highs despite the bearish influence of outside markets for most of the day, as bullish underlying fundamentals maintain a long term supportive theme, traders added.

 

The DTN Meteorlogix Weather forecast said the 10-day outlook, through Sunday, June 22, indicates a chance at drier conditions over the eastern Midwest, due to a deepening upper-atmosphere trough over the region. This development has the potential to bring drier and cooler weather to the Corn Belt east of the Mississippi. Western areas remain in the target for more rains, due to warm air in the Plains clashing with the cool air over the eastern Midwest.

 

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 higher, bouncing off early session lows on strength in soybeans and bullish underlying demand outlooks. Soymeal futures rose to new contract highs again, buoyed by bullish long range demand prospects, the threat of tight soybean supplies and technically inspired buying, traders said. The ability of the market to rise above Wednesday's highs and eclipse psychological resistance at the US$400 per short tonne level attracted speculative buyers, a CBOT floor broker said.

 

Soyoil futures recovered from early losses on soybean strength, supportive demand outlooks and a late recovery from earlier losses in crude oil futures, traders added. A mild correction in the oil/meal spread aided soyoil's gains as well, traders said.

 

July oil shares ended at 45.14% and the July crush ended at 76 1/2 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 3,000 lots.