July 10, 2007

 

CBOT Soy Review on Monday: Rallies; sets new highs on bullish outlooks

 

 

Chicago Board of Trade soybean futures ended higher Monday, rallying to new contract highs in most months, buoyed by technical buying and bullish longer range fundamental outlooks.

 

July soybeans settled 5 1/4 cents higher at US$8.70, and November soybeans finished 6 cents higher at US$9.02. August soymeal settled US$2.80 higher at US$237.90 per short tonne. August soyoil ended 18 points higher at 37.51 cents a pound.

 

Technically inspired buying sparked futures to new highs, with bullish momentum taking form after the most active new crop November contract breached resistance at the US$9 level and then at its prior contract high of US$9.03 1/2, analysts said.

 

Fundamentally, the market is supported by lingering concerns over tightening new crop supply outlooks, with smaller 2007 acreage, and the need to carry prices to levels that will attract additional 2008 U.S. and South American acres underpinning features, analysts added.

 

Favorable near-term weather conditions in the Midwest applied early pressure to prices, but with longer range weather outlooks uncertain, and the critical growing period for soybeans still weeks away, traders remained hesitant to aggressively press the market, a CBOT floor analyst said.

 

Additional support was generated from anticipation of a bullish supply and demand report from the U.S. Department of Agriculture Thursday, traders added.

 

The T-Storm Weather LLC forecast said the latest GFS weather model is complete through this weekend. It does not indicate significant rainfall will affect the eastern Corn Belt this weekend. This will be monitored for a possible reduction in chances. However, it continues to point toward cooler-than-average weather through this weekend - though the intensity of coolness is a bit less.

 

The Commodity Futures Trading Commission will release its commitment of traders report at 3:30 p.m. EDT Monday. The report was delayed from Friday, due to last week's Independence Day holiday.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT on Monday. Analysts anticipate U.S. soybean good-to-excellent crop ratings declining in a range 1 to 3 percentage points.

 

In pit trades, RJ O'Brien bought 800 November, and Fimat bought 300 November. Speculative funds were estimated buyers of 1,500 contracts. Sellers were lightly scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, bouncing back from two-sided early action on spillover strength from soybeans. The products garnered support from soybeans, but continued to consolidate within last week's wide trading ranges, analysts said. Otherwise, futures had little fundamental news to generate price direction, but anticipated lower new crop soybean supplies remain underpinning influences, analysts added.

 

July oil share ended at 44.06% and the July crush ended at 61 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.