September 13, 2007

 

CBOT Soy Review on Wednesday: Rallies on USDA data, soyoil strength

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, rallying on supportive crop data from the U.S. Department of Agriculture, technical support and borrowed strength from soyoil.

 

September soybeans settled 20 cents higher at US$9.25, and November soybeans finished 18 cents higher at US$9.38 1/2. September soymeal settled US$4.20 higher at US$254.20 per short tonne, and December soymeal settled US$3.90 higher at US$261.10. September soyoil ended 99 points higher at 38.87 cents a pound, and December soyoil finished 107 points higher at 39.52 cents.

 

The USDA's cut to yield and stock forecasts provided a boost to prices, with the bullish impact of soyoil price strength and a lift from technical buying helping produce new contract highs, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The upward push brought in a lot of fund buying to propel prices to their highest level since 2004. However, spillover pressure from a late collapse in wheat futures coupled with a lack of follow through buying at session highs, opened the door for profit-taking to emerge and trim earlier gains, analysts added.

 

Meanwhile, deferred month futures lost ground to nearby contracts, as South American hedge selling applied mild pressure to weigh on the back months, Scoville added.

 

Nevertheless, the market remains within a bullish uptrend, with supportive longer range demand prospects seen limiting near term selling interest, analysts added.

 

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 550,000 metric tonnes. Soymeal sales are seen in the 25,000 to 125,000 metric-tonne range, and soyoil sales are pegged to fall within a range of none to 20,000 tonnes.

 

In pit trades, ADM Investor Services bought 2,000 November, RJ O'Brien bought 1,000 November, JP Morgan, Citigroup and MF global each bought 500 November, and Iowa Grain bought 400 November. Speculative fund buying was estimated at 12,000 lots. Rand Financial sold 800 November, UBS Securities sold 900 November, and JP Morgan sold 500 November and 400 May.

 

 

SOY PRODUCTS

 

Soy products ended higher across the board, with soyoil futures soaring to 23-year highs. Soyoil futures catapulted higher on the back of lower-than-expected USDA ending stocks forecasts amid increased domestic use for biodiesel and higher projected exports, analysts said. Spillover support from surging crude oil futures provided the finishing touches for the market's bullish romp to higher levels, analysts added.

 

The USDA sharply reduced 2006-07 and 2007-08 soyoil ending stocks by 480 and 520 million pounds respectively.

 

Soymeal futures climbed to new contract highs as well, buoyed by the bullish tonnee circulating through the complex, with strong global demand for feed an underpinning influence as well, traders said. However, late profit taking and oil/meal spreading managed to cap upside potential and trim the advances, traders added.

 

December oil share ended at 43.08% and the September crush ended at 61 3/4 cents.

 

In soymeal trades, ADM Investor Services bought 700 December, and JP Morgan bought 400 December. Bunge Chicago sold 500 December, and Fimat sold 300 December and 400 October. Speculative fund buying was estimated at 3,000 lots.

 

In soyoil trades, Bunge Chicago bought 600 December, Tenco bought 500 December, JP Morgan bought 300 December, and Rand Financial bought 1,200 December. JP Morgan sold 300 December, Tenco sold 600 December, Fimat sold 400 December, and Rand Financial sold 300 December. Speculative fund buying is estimated at 5,000 lots.