July 27, 2007

 

CBOT Soy Review on Thursday: Higher; wheat spillover; weather concerns

 

 

Chicago Board of Trade soybean futures ended higher Thursday, rising on spillover strength from wheat and lingering concerns about dryness issues for crops in the northwestern Midwest, analysts said.

 

August soybeans settled 6 1/2 cents higher at US$8.21 1/2, and November soybeans finished 7 1/4 cents higher at US$8.46 1/2. August soymeal settled US$2.70 higher at US$217.70 per short tonne. August soyoil ended 3 points lower at 36.59 cents a pound.

 

The combination of the weather, and borrowed strength from wheat price action served as the catalyst for the gains, analysts said.

 

Overall activity was subdued, with prices holding in a range for most of the day, until a midday drop in wheat futures attracted profit taking pressure to briefly pull prices into negative territory, analysts added.

 

The declines were short lived, as the inability of futures to find follow through selling to penetrate the week's lows rekindled buying to firmly plant prices above unchanged levels once again, traders said.

 

Despite the wide price fluctuations of the day, futures remained within the confines of the week's trading range, giving little added momentum to provide lasting direction, analysts added.

 

Nevertheless, bullish longer range outlooks, with yield uncertainties in the western Midwest and a tightening supply picture for next year, remain underlying features to keep a near term floor under the market, analysts said.

 

The DTN Meteorlogix forecast said the six-to-ten-day time frame, through the first weekend of August, features a series of cool fronts moving from western Canada southeast toward the Northern Plains and Midwest. This series of cool fronts may produce some more showers in the central U.S. However, a trend in actual rainfall from these fronts so far in the season has been disappointing; thus, the outlook is for no more than normal moisture across the central U.S. crop areas due to the weather pattern during the next 10 days.

 

In pit trades, Man Financial and RJ O'Brien each bought 400 November, Rand Financial bought 500 November. Tenco sold 700 November, Fimat sold 500 November and RJ O'Brien sold 200 November. Speculative fund buying is estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal gaining product share on borrowed strength from soybeans. The market was aided by light technical buys, before a late setback in soybeans applied pressure to cap upside potential, analysts said.

 

Soyoil futures ended mostly lower, backpedaling from earlier gains. Futures initially rose on spillover support from Malaysian palm oil and crude oil futures, with higher-than-expected weekly export sales adding to the supportive mix, analysts said. However, as crude oil and soybeans stumbled lower after midday, soyoil retreated with meal/oil spreading helping pin prices in negative territory, analysts added.

 

August oil share ended at 45.66% and the August crush ended at 60 cents.

 

In soymeal trades, buyers and sellers were scattered across various commission houses, with Fimat a featured buyers and RJ O'Brien a key seller. Speculative fund buying was estimated at 2,000 lots.

 

In soyoil trades, Bunge Chicago bought 600 December, and Fimat and Rosenthal each sold 1,000 December. Speculative fund selling was estimated at 1,500 contracts.