July 6, 2007

 

CBOT Soy Review on Thursday: Edges higher; rebounds from Tuesday's losses

 

 

Chicago Board of Trade soybean futures ended higher Thursday, staging a modest rebound from Tuesday's profit taking setback.

 

July soybeans settled 4 cents higher at US$8.54 1/2, and November soybeans finished 4 1/4 cents higher at US$8.86 1/2. July soymeal settled US$0.30 higher at US$232.90 per short tonne. July soyoil ended 32 points higher at 36.68 cents a pound.

 

The market was seemingly buying time until fresh fundamental news emerges, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

Futures have factored in reduced soybean acreage estimates, but looked to add some weather premium amid warmer, drier near term outlooks, Hoops added.

 

The market settled into a trading range after early price strength failed to uncover any significant follow through momentum, traders said.

 

The new crop November contract's upside potential was limited by its inability to challenge resistance at nearby highs, while dry enough conditions in the Midwest and new crop tightening supply forecasts limited downside movement, Hoops added.

 

Otherwise, activity was light with a lack of fresh news and the absence of many traders following the midweek Independence Day holiday contributing to the subdued tonnee, traders said.

 

The DTN Meteorlogix forecast calls for generally hot and dry weather across the western Corn Belt, west of the Mississippi River, through the weekend. High temperatures will reach the mid-90s Fahrenheit in the western Midwest. Soil moisture reserves are still adequate in Iowa, Nebraska, Missouri and South Dakota, but are running low in Minnesota, giving Minnesota the greatest amount of short-term crop weather stress.

 

Meanwhile, weather conditions will be generally favorable through the weekend east of the Mississippi River. Temperatures will be seasonal to above average, which will favor corn pollination and soybean flowering.

 

U.S. Department of Agriculture is scheduled to release weekly export sales figures at 8:30 a.m. EDT Friday. Analysts predict soybean sales of 125,000 to 275,000 metric tonnes.

 

In pit trades, ADM Investor Services was a featured buying, with sellers lightly scattered among various commission houses. Speculative fund buying was estimated at 2,000 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, edging up in unison with the price gains in soybeans. Soymeal futures followed the lead of soybeans, but managed to lose product share on late soyoil/soymeal spreading, traders said. Technical selling added to the market's limited upside mobility Thursday, as the inability of active contracts to challenge recent highs attracted sellers, analysts said.

 

Soyoil futures ended higher across the board, pulled up on spillover support from soybeans. The market is seemingly stuck in a sideways pattern, unable to muster up enough strength to extend recent gains, with lackluster price movement of Malaysian palm oil and crude oil futures failing to spark significant momentum, analysts said. Nevertheless, an adjustment of meal/oil spread did provide strength to boost oil share, analysts added.

 

July oil share ended at 44.05% and the July crush ended at 61 1/4 cents.

 

In soymeal trades, speculative fund buying was estimated at 1,500 lots, with buyer and sellers lightly scattered among various commission houses.

 

In soyoil trades, ADM Investor Services bought 400 December, Fimat bought 300 December, and Iowa Grain bought 300 July. Bunge Chicago sold 500 August, and UBS Securities sold 1,100 August. Speculative fund buying was estimated at 2,000 lots.