September 12, 2007

 

CBOT Soy Review on Tuesday: Higher; bounce late on speculative buys

 

 

Chicago Board of Trade soybean futures ended Tuesday's session posting modest gains, managing to climb to two-month highs on speculative buys amid borrowed strength from wheat and technical strength.

 

September soybeans settled 1 1/2 cents higher at US$9.05, and November soybeans finished 2 1/2 cents higher at US$9.20 1/2. September soymeal settled US$0.40 lower at US$250.00 per short tonne, and December soymeal settled US$0.20 lower at US$257.20. September soyoil ended 20 points higher at 37.88 cents a pound, and December soyoil finished 13 points higher at 38.45.

 

Pre-crop report consolidation was a featured attraction throughout the day, but with a late spike to record highs in wheat, speculative buying surfaced to trigger buy-stop orders, as active contracts fed off bullish technical momentum, analysts said.

 

Many traders were seemingly content to square a few positions in an effort to reduce some risk ahead of Wednesday's crop report, with profit-taking from recent gains featured. However, bullish longer-range fundamental views and the ability of the November futures to eclipse resistance at Monday's highs provided a spark to lift futures to session highs on the close, traders said.

 

Meanwhile, nervousness tied to the uncertainty of soybean yields limited further gains, while strength in soyoil added to the positive underlying tonnee, analysts 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. The 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 a generally dry weather pattern covers all but the far eastern Midwest during the balance of this week. Conditions will be favorable for harvest or for fields to firm up after recent rains. Forecast weather maps for next week indicate a chance for the upper atmosphere pattern to re-form in a similar fashion to the pattern which dominated the central U.S. during August. The jet stream track runs across Minnesota and Iowa. If this sets up, wetter conditions over the northern and the western Midwest during the first part of the fall season may return. Rainfall does not look to be as heavy as during August; however, harvest delays could develop, Meteorlogix reported.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with the soyoil gaining product share versus soymeal. Soyoil futures ended higher climbing to new one-month highs on a combination of spillover support from crude oil and Malaysian palm oil futures, technical buying and bullish demand outlooks, analysts said.

 

Soymeal futures ended narrowly mixed, consolidating after recent gains, with oil/meal spreading applying light pressure while supportive world feed demand continued to underpin prices, analysts said.

 

December oil share ended at 42.77% and the September crush ended at 61 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.