August 28, 2007

 

CBOT Soy Review on Monday: Rises on technical buying; crop concerns

 

 

Chicago Board of Trade soybean futures ended higher Monday, climbing to session highs late on technically inspired buying and lingering crop concerns, analysts said.

 

September soybeans settled 7 1/2 cents higher at US$8.56 1/2, and November soybeans finished 7 3/4 cents higher at US$8.72 3/4. September soymeal settled US$2.20 higher at US$235.90 per short tonne, and December soymeal settled US$2.00 higher at US$242.70. September soyoil ended 26 points higher at 36.18 cents a pound, and December soyoil finished 22 points higher at 36.89.

 

The market held firm for most of the day, garnering strength from technically motivated buying, with underlying support seen from lingering uncertainty about southern Midwest and Delta soybean crops, analysts said.

 

Improved crop weather across most of the soybean belt this week applied pressure initially, but with forecasts for no meaningful moisture to reach many dry areas of the southern soybean belt this week, bullish enthusiasm continued to fuel upside moves, a trader said.

 

Nevertheless, technical momentum was the key driver of prices, with pre-placed buy stop orders accelerating the gains once the November future successfully pushed above its 40-day and 50-day moving averages, analysts added.

 

Outlooks for another week of crop rating declines provided underlying support to prices as well, a trader said.

 

Some locally heavy rainfall is expected during the next two days in the wetter sections of the northwest Midwest, Cropcast Weather Services said in a forecast. However, the rains should be neither as heavy nor as persistent as last week. Most importantly, the return of drier weather from Wednesday through the end of the 10-day period should give the region a needed opportunity to see flooding concerns abate, Cropcast said.

 

The continued dry and frequently hot weather in the southern one-quarter of the belt is becoming a less significant concern, as even double crop soybeans will begin to near maturity, Cropcast added.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT. Analysts anticipate crop ratings to decline by 1 to 2 percentage points.

 

In pit trades, Fimat bought 500 November, Tenco bought 300 November, and Fortis bought 400 November. Iowa Grain sold 400 November. Speculative fund buying was estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, bouncing with the upward push in soybeans. Soymeal futures rose to 2-week highs, buoyed by technically inspired buying, with prices firmly above major moving average support, analysts said. Solid underlying demand remains the fundamental catalyst to keep futures churning higher, analysts added.

 

Soyoil futures rose in step with the rest of the complex, with a late push in crude oil futures providing spark to push futures to session highs on the close, analysts said.

 

December oil share ended at 43.18% and the September crush ended at 60 1/2 cents.

 

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

 

In soyoil trades, Bunge Chicago bought 400 December, and Fimat bought 300 September. Tenco sold 300 September, Fimat sold 300 December, with Iowa Grain and Citigroup each selling 200 December. Speculative fund buying was estimated at 1,000 lots.