August 18, 2007

 

CBOT Soy Review on Friday: Futures end higher amid lingering concerns

 

 

Chicago Board of Trade soybean futures ended higher Friday, consolidating after Thursday's sharp declines on the idea that the market had been oversold and lingering concerns surrounding southern Midwest and Delta crops.

 

September soybeans settled 12 1/4 cents higher at US$8.11 1/2, and November soybeans finished 13 1/4 cents higher at US$8.27 3/4. September soymeal settled unchanged at US$218.80 per short tonne, and December soymeal settled US$0.20 higher at US$225.70. September soyoil ended 89 points higher at 35.39 cents a pound, and December soyoil finished 105 points higher at 36.05.

 

The market staged a modest recovery from Thursday's declines, as the stabilization of financial markets enabled futures to find their footing, a CBOT floor analyst said.

 

Speculative buying was a feature, with futures rebounding from oversold on weather forecasts that reduced the potential for rains to reach heat-stressed crops in the southern soybean belt , traders said. Commercial and end user buying is seen adding to price strength as well, traders said.

 

Otherwise, many traders remained cautious heading into the weekend following recent volatility, traders added.

 

The DTN Meteorlogix weather forecast calls for a renewed round of showers during the coming weekend in the northern Midwest - mostly north of Interstate 80. This area will have rainfall of up to one-and-a-half inches during the coming weekend. Rainfall will benefit late-season crops, giving soybeans moisture for good pod filling, Meteorlogix said.

 

However, hot and dry weather in the southern Midwest and Delta shows little sign of easing during the next seven days. Forecast models show the hot weather-producing upper-atmosphere high-pressure ridge largely remaining in place over the southern U.S. through the weekend of August 24-26. In addition, tropical weather systems Erin and Dean don't appear to be tracking far enough northward to offer significant moisture inflows to the dry south-central U.S., Meteorlogix reports.

 

In pit trades, ADM Investor Services, Tenco, Term Commodities, Fortis, and UBS Securities each bought 500 November, and FCStonnee bought 400 November. Fimat and Shatkin/Arbor each sold 1,000 November, ADM Investor Services sold 500 November, 300 March, 300 May and 500 July. Speculative fund buying was estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, with the soyoil the clear upside leader. Soyoil futures rebounded from Thursday's sell-off on commercial buying. Technically inspired buying, speculative short covering and spillover support from crude oil futures were underpinning forces as well, analysts said.

 

Soymeal futures ended higher, managing a late session bounce on pre-weekend position squaring and borrowed strength from soybeans, traders said. The market was under pressure for most of the day from oil/meal spreading, as the market consolidated within Thursday's trading range, traders added.

 

December oil share ended at 44.40% and the September crush ended at 59 1/4 cents.

 

In soymeal trades, UBS Securities bought 800 December, Prudential Financial bought 400 December, and Tenco bought 300 September. Bunge Chicago sold 500 December and Iowa Grain sold 700 December. Speculative funds were net sellers on the day.

 

In soyoil trades, Bunge Chicago bought 500 December, UBS Securities bought 500 September and 500 October, Fimat bought 400 December, Tenco bought 400 September, JP Morgan bought 300 December and 400 September, and ADM investor Services bought 300 September. Sellers were light, scattered among various commission houses. Commercials were estimated buyers of 4,000 lots.