August 30, 2007

 

CBOT Soy Review on Wednesday: End up; climbs on borrowed strength

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, recovering from two-sided activity on borrowed strength from soyoil and wheat futures, analysts said.

 

September soybeans settled 3 1/4 cents higher at US$8.58 1/2, and November soybeans finished 2 cents higher at US$8.74 1/4. September soymeal settled US$0.20 higher at US$235.00 per short tonne, and December soymeal settled US$0.50 higher at US$242.50. September soyoil ended 21 points higher at 36.26 cents a pound, and December soyoil finished 17 points higher at 36.99.

 

Spillover support from soyoil and wheat provided underlying strength to prices, with the ability of active contracts to hold support at major moving averages aiding the higher tonnee as well, an analyst said.

 

A quiet news front promoted a back and forth consolidation theme for most of the day, with lingering uncertainties tied to the 2007 U.S. soy crop keeping a level of support in prices, analysts said.

 

However, technical selling and pre-holiday weekend position squaring amid the exhaustion of buying at session highs managed to keep a lid on upside moves, analysts added.

 

Nevertheless, the market has a bullish mentality and with fundamental and borrowed support, upside moves remain the path of least resistance, a CBOT floor broker said.

 

Meanwhile, the DTN Meteorlogix forecast calls for generally dry conditions and warmer temperatures for several days in the Midwest following rains of up to one inch, with locally heavier amounts, in eastern Nebraska, northern Iowa, and southern Minnesota Tuesday.

 

The eastern and southern sectors of the Mississippi Delta have a good chance for rain showers during the balance of this week. This trend will be more favorable for crop conditions. However, hot and dry weather continues to stress late-filling soybeans in the northern half of the region, especially in Arkansas and western Tennessee, Meteorlogix reports.

 

On tap for Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Analysts predict soybean sales of 300,000 to 800,000 metric tonnes. Soymeal sales are seen in the 750,000 to 175,000 metric-tonne range, and soyoil sales are pegged to fall within a range of none to 30,000 tonnes.

 

In pit trades, Tenco bought 1,000 November, ADM Investor Services and Fimat each bought 400 November and Rand Financial bought 300 November. Sellers were scattered among various commission houses. Speculative fund buying was estimated near 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil the upside leader of the products. Soyoil futures rallied to two-week highs, extending its recovery from prior lows on speculative-led buys, analysts said. Support from underlying demand strength and the bullish influence of higher crude oil prices as it relates to future biodiesel demand served as the catalysts to rekindle buying interest, analysts said.

 

Soymeal futures ended mixed, with prices consolidating amid the absence of fresh news, with adjustments in the meal/oil spread applying light pressure, analysts said.

 

December oil share ended at 43.27% and the September crush ended at 57 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated net sellers on the day.

 

In soyoil trades, ADM Investor Services bought 500 December, Fimat bought 400 December, and Rand Financial bought 300 December. JP Morgan sold 400 December, Citigroup sold 300 December, and Fortis sold 300 September. Speculative fund buying was estimated between 2,000 and 3,000 lots.