July 1, 2006

 

CBOT Soy Review on Friday: Ends higher, rallies on speculative buys

 

 

Chicago Board of Trade soybean futures ended sharply higher Friday, propelling to over two-week highs on speculative buying tied to outside market influences, weather concerns and supportive acreage and stocks data.

 

July soybeans ended 13 cents higher at US$5.94 3/4, November soybeans finished 13 cents higher at US$6.22 1/2, July soymeal settled US$2.20 higher at US$174.60 a short tonne, while December soyoil ended 56 points higher at 27.27 cents a pound.

 

The market benefited from a plethora of supportive inputs that enabled futures to bolt higher, as end-of-the- month and end-of-quarter fund buying took center stage with weather and outside market strength rekindling bullish enthusiasm, analysts said.

 

Hotter and drier weather forecasts for the western Midwest helped sustain the supportive tonnee over the course of the day, with technically inspired buying associated with prices climbing above meaningful resistance, providing incentives to encourage fresh buying as well, traders added.

 

Meanwhile, the DTN Meteorlogix forecast calls for very little appreciable rainfall, along with very warm to hot temperatures across the Midwest during the weekend. Rainfall will total no more than about one-half inch in the northern through eastern Midwest-Minnesota southeast to Indiana and Ohio. In addition, temperatures will range up to the mid-90s Fahrenheit in the western Midwest - west of the Mississippi River - through Sunday, and from 93 to 95 degrees Fahrenheit in central and southern Illinois. The heat will also take its toll on soil moisture; over much of the central and western Midwest, soil moisture supplies are running short, especially at the subsoil level, Meteorlogix said.

 

Ahead of the open, USDA said 2006 U.S. soybean planted acreage totaled 74.9 million acres, up 4% from last year, but down 3% from the USDA's planting intentions estimate of 76.895 million acres. Traders anticipated the figure would fall within a range of 74.2 million to 76.5 million. June 1 stocks were pegged at 990 million bushels, below the average trade estimate of 1.012 billion and near the low end of the range that span from 971 million to 1.041 billion.

 

In pit trades, ADM Investor Services and Citigroup each bought 1,000 November, ABN Amro, Man Financial and Rand Financial each bought 1,500 November, Calyon Financial and RJ O'Brien each bought 2,000 November.

 

On the sell side, ADM Investor Services sold 1,000 November, Tenco sold 2,000 November and UBS Securities sold 1,000 November. Speculative funds sold an estimated 9,000 to 10,000 contracts.

 

South American soybean futures ended lower, with the July futures settling 4 cents lower at US$6.23.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board Friday. Soyoil futures were the dominant leader of the products once again, with active futures rallying to new contract highs. The market followed the supportive theme in soybeans, with higher gold, silver and crude oil futures attracting speculative buying to cement prices firmly in positive territory, analysts said.

 

Soymeal futures ended at higher levels Friday, buoyed by speculative buying attributed to borrowed momentum from soybeans. However, upside movement was capped by soyoil/soymeal spreading and higher-than-expected commercial deliveries posted against the nearby July futures, traders said.

 

July oil share ended at 43.05%, and the July crush ended at 79 3/4 cents.

 

In soymeal trades, Rand Financial bought 500 December, Calyon Financial, and JP Morgan each bought 300 December and RJ O'Brien bought 400 December. ABN Amro sold 300 December, Man Financial sold 400 July and JP Morgan sold 500 July. Speculative funds were estimated net buyers on the day.

 

In soyoil trades, Rand Financial bought 1,300 December, Man Financial bought 1,000 December, ABN Amro bought 500 December, ADM Investor Services, Calyon Financial and Tradelink were each buyers of 400 December. Tenco and RJ O'Brien each sold 500 December, Fimat and Rand Financial each sold 400 December, ADM Investor Services and Citigroup each sold 300 December. Speculative funds were estimated buyers of 4,000 contracts.