July 15, 2006

 

CBOT Soy Review on Friday: Edges higher; weather, tech buys underpin

 

 

Chicago Board of Trade soybean futures ended higher Friday, bouncing back after recent declines as stressful near-term Midwest heat, broad-based commodity strength and technical buying combined to underpin prices.

 

August soybeans ended 2 3/4 cents higher at US$6.03, November soybeans finished 3 cents higher at US$6.25, December soymeal settled US$0.20 higher at US$176.60 a short tonne, and December soyoil ended 25 points higher at 28.33 cent a pound.

 

The market added a little risk premium heading into a hot, dry weekend, and with uncertainty surrounding longer-range weather maps, futures were poised to edge higher following losses in the two prior sessions, said Bill Nelson associate vice president with A.G. Edwards and Sons in St Louis.

 

The market is looking at several days of dry weather, and with the level of confidence better in short-term forecasts than long-term, upside movement was the theme of the day, traders said. The active November contract traded an outside higher day on technical charts, quietly propelling with the aide of higher metals and energy markets attracting speculative buying and short covering, floor sources said.

 

Futures initially drifted lower, following the overnight theme, with pretty good overnight rains in the western belt providing support. However, the market discounted the rains, as outlooks for dryness and heat in the Midwest next week encouraged cautious upside movement, Nelson added.

 

Meanwhile, supportive crush data provided fundamental strength to go along with outlooks for several days of dry weather, keeping prices firmly underpinned for the remainder of the day.

 

The DTN Meteorlogix Weather Service forecast said weekend temperatures will be in the triple digits from North Dakota into central Texas. Most of the rest of the central U.S. will be in the 90s, with little rain falling. That pattern will hold through the weekend and into next week, with little or no rain expected across the region, Meteorlogix added.

 

In pit trades, ADM Investor Services and Calyon Financial each bought 1,000 November, Fortis bought 1,500 November and JP Morgan bought 400 November. Speculative fund buying were estimated buyers of 3,000 contracts.

 

On the sell side, Rand Financial sold 500 November, FCStonnee, UBS Securities and Citigroup each bought 300 November.

 

South American soybean futures ended higher, with the July future settling 4-cent higher at US$6.37.

 

 

SOY PRODUCTS

 

Soy product futures ended higher Friday. Soymeal edged higher in step with soybeans, but remained the weakest of the soy complex, continuing to lose product share to soyoil. Mild support was generated from supportive crush data from the National Oilseed Processors Association.

 

Soyoil futures ended higher across the board, climbing on speculative buying attributed to the bullish energy component in the market. Biodiesel enthusiasm remains an underpinning force in the market, as record high crude oil futures continues to promote food for fuel thoughts, analysts said. Meanwhile, higher-than-expected stocks in the NOPA crush report provide light pressure, traders added.

 

July oil share ended at 44.41%, and the July crush ended at 75 3/4 cents.

 

In soymeal trades, FCStonnee bought 300 December and Fimat sold 400 December.

 

In soyoil trades, Fimat bought 400 December, FCStonnee and Calyon Financial each bought 300 December. FCStonnee and JP Morgan sold 300 December, Tenco sold 500 December and Rand Financial sold 400 December. Commodity funds were estimated buyers of 1,300 contracts.