June 21, 2007

 

CBOT Soy Review on Wednesday: End higher; recoups some of Tuesday' losses

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, recouping a portion of Tuesday's losses on speculative buying associated with bullish longer term fundamental outlooks, analysts said.

 

July soybeans settled 10 cents higher at US$8.39, and November soybeans finished 10 1/2 cents higher at US$8.74 1/2. July soymeal settled US$3.50 higher at US$233.20 per short tonne. July soyoil ended 1 point lower at 35.31 cents a pound.

 

Tuesday's losses were a bit overdone, and with neighboring wheat futures up sharply, and talk of ridging returning to the eastern Midwest weather, traders returned their focus to bullish longer term outlooks, said Brian Hoops, president Midwest Market Solutions in Yankton, South Dakota.

 

The absence of follow through selling from Tuesday's price slide and ideas longer range forecasts calling for drier conditions are more relevant to soybean production than current rains, supported prices, Hoops added.

 

Speculative buying was a featured attraction, with talk by private weather forecasters of a moisture blocking ridge building in the Midwest, keeping sellers reluctant to aggressively press the market, a CBOT floor trader said.

 

Underlying buying from ideas the market still is in a frantic pace to try and acquire South American acres for next year, continues to attract speculative buying interest, traders added. Meanwhile, weakness in world vegoil and crude oil futures applied light pressure to soyoil and subsequently limited advance in soybeans over the course of the day, Hoops said.

 

The DTN Meteorlogix forecast calls for rainfall Thursday through Saturday to total up to one and one-half inches, with locally heavier rainfall, from Iowa through the northern half of Illinois. Farther east, Indiana and Ohio are in line to receive up to one inch of rain during the late-week time period.

 

In the six- to ten-day time frame, extending through Saturday, June 30, variable temperatures along with mostly dry weather are featured for the Midwest. This outlook for a drier weather pattern means that the next three to five days are very important for their chances at bringing rainfall to the U.S. Corn Belt, Meteorlogix said.

 

The U.S. Department of Agriculture is scheduled to release weekly export sales figures at 8:30 a.m. EDT Thursday. Analysts predict soybean sales of 100,000 to 300,000 metric tonnes.

 

In pit trades, ADM Investor Services bought 1,000 November, Citigroup bought 500 November, and Penson GHCO bought 600 November. Sellers were scattered among various commission houses. Speculative fund buying was estimated at 5,000 lots.

 

 

SOY PRODUCTS  

 

Soy product futures ended mostly higher, buoyed by underlying price support from soybeans. Soymeal futures ended higher, as futures consolidated Tuesday's declines, analysts said. A modest adjustment in the soymeal/soyoil spread relationship added to soymeal's gains as well, traders said.

 

Soyoil futures settled mixed, with prices finishing near unchanged levels. The market was able to find stability after a two-sided day, with lower overnight Malaysian palm oil prices, weakness in crude oil futures and commercial selling applying pressure to the market, analysts say.

 

July oil share ended at 43.09% and the July crush ended at 62 1/2 cents.

 

In soymeal trades, Fimat bought 300 December, and Rand Financial bought 500 December. Bunge Chicago and Prudential Financial each sold 300 December, and JP Morgan sold 300 July and 300 August. Speculative fund buying was estimated at 2,000 lots.

 

In soyoil trades, ADM Investor Services bought 300 December, Bunge Chicago bought 700 July, Rand Financial bought 600 July and JP Morgan bought 300 July. Bunge Chicago sold 2,000 December, Penson GHCO sold 900 July, and JP Morgan sold 300 July and 400 August. Commercial selling was estimated 2,000 contracts, while speculative funds were estimated net buyers on the day.