September 11, 2007

 

CBOT Soy Review on Monday: Settles up on wheat strength, technical buys

 

 

Chicago Board of Trade soybean futures ended higher Monday, climbing on speculative buying amid spillover from wheat, technical strength and a lack of selling pressure.

 

September soybeans settled 12 1/2 cents higher at US$9.03 1/2, and November soybeans finished 12 3/4 cents higher at US$9.18. September soymeal settled US$3.00 higher at US$250.40 per short tonne, and December soymeal settled US$3.00 higher at US$257.40. September soyoil ended 40 points higher at 37.68 cents a pound, and December soyoil finished 41 points higher at 38.32.

 

The bullish influence of wheat attracted speculative buyers, with technical momentum adding support to keep sellers on the run, said John Kleist of Kleist Ag Consulting.

 

The market managed to extend its bullish trend, rising to nearly two-month highs, with buy stops activated once the most active November future pushed above last week's high of US$9.16 1/2, traders said.

 

Otherwise, the market had little bearish inputs to encourage sellers, as outlooks for higher production estimates in Wednesday's crop report was trumped by the psychology of what demand will be down the road, Kleist added.

 

The U.S. Department of Agriculture is scheduled to release its latest production, yield and supply and demand estimates Wednesday at 8:30 a.m. EDT. The average of analysts' estimates pegged 2007 soybean production at 2.650 billion bushels, up from the August figure of 2.625 billion. The average was from a range of 2.562 billion to 2.740 billion bushels. Ending stocks for 2006-07 were pegged at 561 million bushels from a range of 527 million to 578 million. 2007-08 ending stocks were estimated at 217 million bushels from a range of estimates that span from 81 million to 322 million bushels.

 

The DTN Meteorlogix forecast said rainfall patterns spreading moisture of up to one inch across the Midwest. This rain will cause some delays in harvest progress for soybeans. At this time, however, delays are not expected to cause a significant problem. Late-week temperatures from central Iowa north may reach the freezing level. The chilly weather this week is unfavorable for maturing summer crops; however, it is not expected to cause significant damage, Meteorlogix said.

 

In pit trades, speculative fund buying was estimated at 3,000 contracts, with buyers and sellers scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures propelled higher, rallying in unison with soybeans. Soyoil futures bounced on the soy strength, with higher Malaysian palm oil prices overnight, a late rally in crude oil and future demand prospects serving as underpinning features, analysts said.

 

Soymeal futures ended up, feeding off the bullish tonnee filtering through the complex. Technical strength and bullish global feed demand outlooks were supportive features, analysts said.

 

December oil share ended at 42.67% and the September crush ended at 61 3/4 cents.

 

In soymeal trades, speculative fund buying was estimated at 2,000 lots, with buying and selling scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated near 3,000 lots.