June 14, 2008

 

CBOT Soy Review on Friday: Climbs on fundamentals, acreage concerns

 

 

Chicago Board of Trade soybean futures rallied Friday, climbing on bullish underlying fundamentals and acreage worries associated with the Midwest weather calamity.

 

July soybeans settled 23 1/2 cents higher at US$15.60 and November soybeans ended 18 1/2 cents higher at US$15.31. July soymeal settled US$7.00 higher at US$409.20 per short tonne. July soyoil finished 1 point lower at 66.19 cents per pound.

 

Old crop contracts were the upside leader of the market, buoyed by tightening supplies, logistical problems as a result of the Midwest floods, technical buying and the need to push prices to levels that will ration demand, analysts said.

 

Midwest floods bolstered both old and new crop futures, as outlooks for deteriorating crop conditions and ideas there remains 12 to 15 million soybean acres that need to be seeded of replanted before the optimal planting date of June 20 attracted speculative buyers, analysts added.

 

The new crop acreage uncertainties are placing increased pressure on old crop inventories and that continues to foster interest in bull spreads, traders said.

 

The inverted July/November spread widened to a 29 cent inverse Friday, up from 24 cents on Thursday. The spread has moved from a 6 cent carry on May 21.

 

Spillover support from soymeal futures added strength, with the combination of solid exports, and a strong crushing pace underpinning prices, analysts added.

 

The DTN Meteorlogix Weather forecast said the eastern Midwest will be drier Saturday, but thundershowers are expected to develop again Sunday. In the western half of the region, up to an inch and a half of rain will fall in southern Iowa and northern Missouri. Northern Minnesota and eastern South Dakota will see up to about 0.4 inches. Little or no rain is expected Saturday, but showers likely will return Sunday.

 

On tap for Monday, the National Oilseed Processors Association is scheduled to release its May soybean crush is at 8:30 a.m. EDT (1230 GMT). The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal futures rising to new contract highs. Soymeal was energized by speculative buying associated by strong underlying demand and logistical problems due to Midwest floods, analysts said. Rumors of crushing plants in Iowa shutting down due to the lack of transportation as a result of floods and talk of the closure of some points on the Mississippi river as well aided upside movement, analysts added. The meal market is inverted due to strong nearby demand and logistical issues, with news of canceled delivery receipts helping buoy the market, a cash connected CBOT floor broker said. People want to get receipts off the street ahead of seasonal down time, the broker added.

 

Soyoil futures ended slightly lower, recovering from early losses on pre-weekend position squaring. The market fell under pressure from declines in crude oil futures and meal/oil spreading analysts said.

 

July oil share ended at 44.714% 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 1,000 lots.