June 16, 2006

 

CBOT Soy Review on Thursday: Up; speculative buys, acreage estimate,outside

markets

 

 

Chicago Board of Trade soybeans futures ended higher Thursday, bouncing back from Wednesday's setback on speculative buying amid supportive private acreage estimates and strength in outside markets.

 

July soybeans ended 3 cents higher at US$5.92 1/2, July soymeal settled US$0.10 lower at US$179.10 a short tonne, while July soyoil ended 5 points higher at 24.82 cents a pound.

 

The market made impressive strides Thursday, advancing in the face of favorable crop conditions, as strength related to private acreage estimates and reactions to firm inflationary commodities attracted speculative buyers, said Jack Scoville, analyst with the Price Group in Chicago.

 

Supportive weekly export sales and lingering concerns over heat in the western Midwest aided the firm tonnee as well.

 

However, weather forecasts showing generally favorable near-term conditions with the entire corn belt getting the opportunity for some moisture in the next week applied mild weakness to limit upside momentum, traders said.

 

The upside strength may be a "one-day wonder," as bearish fundamentals and weather forecasts continuing to reduce the threat of crop stress do not provide many supportive inputs for the market, said Scoville.

 

Meanwhile, the U.S. corn belt will see a lot of variation in rain totals over the next several days. But overall the entire corn belt will get the opportunity to receive some moisture next week, said Drew Lerner, meteorologist with World Weather Inc.

 

Hot temperatures expected over the next couple of days in the corn belt will be accompanied by showers and thunderstorms, said Lerner.

 

The heat in the corn belt will be fairly short-lived, perhaps a two-day period, with thunderstorms in the dry areas of western Iowa and additional storms from Kansas to Nebraska into Minnesota providing relief, Lerner added.

 

Private analytical firm Informa Economics estimated 2006-07 soybean plantings at 74.385 million acres. In March, the U.S. Department of Agriculture estimated soybean plantings at 76.895 million. USDA is scheduled to release its next acreage estimate at 7:30 a.m. CDT on June 30.

 

There is widespread expectation for a smaller soybean acreage number, but the Informa number was more of a decline than the average trade guesses, Scoville added.

 

USDA's weekly export sales data showed soybean sales at 383,500 metric tonnes for old crop and 55,200 tonnes for new crop. This compares to trader estimates of 100,000 to 300,000 tonnes.

 

In pit trades, JP Morgan bought 2,000 November; Citigroup bought 700 November; Tenco bought 500 November; and ADM Investor Services and ABN Amro each bought 400 November. Commodity funds were estimated buyers near 5,000 lots.

 

On the sell side, Term Commodities sold 800 November; Rand Financial sold 300 July and 400 November; and Refco sold 300 November.

 

South American soybean futures ended higher, with the July contract settling 2 cents higher at US$6.14 1/2.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, in tune with the supportive tonnee in soybeans.

 

Soymeal futures were mostly higher, supported by spillover from soybeans and higher-than-expected weekly export sales.

 

Soyoil futures bounced higher, fueled by support from soybeans and the supportive influence of higher outside energy prices, analysts said.

 

However, overall activity was subdued with futures continuing maintain a sideways consolidative trading pattern, traders add.

 

July oil share ended at 40.93%, and the July crush ended at 74 1/2 cents.

 

In soymeal trades, buyers were scattered among various commission houses. Citigroup sold 300 December, Man Financial sold 300 July, with Bunge Chicago and Prudential Financial key sellers.

 

In soyoil trades, buyers were scattered among various commission houses. On the sell side, Citigroup sold 300 July, Fimat sold 400 July, with Tenco, Bunge Chicago and JP Morgan featured sellers.