September 28, 2007

 

CBOT Soy Review on Thursday: Sets new highs on bullish outlooks

 

 

Soybean futures on the Chicago Board of Trade ended sharply higher Thursday, setting new contract highs as bullish fundamental outlooks inspired speculative buyers to keep futures in a steep uptrend, analysts said.

 

November soybeans settled 18 1/4 cents higher at US$10.09 and January soybeans ended 19 cents higher at US$10.25 1/4. October soymeal settled US$4.40 higher at US$282.80 per short tonne, and December soymeal settled US$4.00 higher at US$288.80. October soyoil ended 71 points higher at 39.68 cents a pound, and December soyoil finished 81 points higher at 40.35.

 

The market is digesting a cavalcade of bullish inputs, with weakness in the U.S. dollar, strong demand for soybeans and the products, yield uncertainties and concerns surrounding a dry start to Brazil's planting season promoting bullish long range forecasts, said Joe Victor, analyst with Allendale Inc. in McHenry, Ill.

 

The market rallied to its highest levels in three years with active contracts firmly trading above the key US$10.00- per-bushel level. The impact of record highs in wheat added to the bullish tonnee, as high feed wheat prices make soymeal an attractive alternative, Victor added.

 

The weakness in the dollar is making U.S. grain and oilseeds more attractive in world markets, and with the need to push prices to levels that will help stimulate increased farmer plantings in South America and in the U.S. in 2008 generated speculative interest, analysts said.

 

Otherwise, technical momentum was featured, with advances accelerating after the November contract moved firmly above the psychological US$10.00-per-bushel mark, traders said. Weekly export sales and a supportive crush figure added strength, as traders say high prices have yet to ration demand, analysts added.

 

The DTN Meteorlogix Weather Service forecast said dry weather and near- to above-normal temperatures continue in northern Mato Grosso, Brazil. Little change in the forecast is expected during the next 10 days. Long-range guidance indicates scattered showers and thunderstorms could develop during the week of Oct. 7.

 

Significant soybean planting can't take place until the rains arrive, Meteorlogix reports.

 

On tap for Friday, U.S. Department of Agriculture is scheduled to release its quarterly grain stocks report Friday at 8:30 a.m. EDT. The average of analysts' estimates surveyed by Dow Jones Newswires pegs U.S. soybean supplies as of Sept. 1 at 552 million bushels. The estimates ranged from 543 million to 558 million bushels.

 

In pit trades, ADM Investor Services bought 600 November, Fimat bought 400 November, FCStonnee and JP Morgan each bought 300 November. Sellers were lightly scattered among various commission houses. Speculative fund buying was estimated at 6,000 contracts.

 

SOY PRODUCTS

 

Soy product futures catapulted higher Thursday, buoyed by bullish demand profiles. Soymeal futures soared to new contract highs, bolstered by speculative and commercial buying as worries over tightening world feed supplies and a weak U.S. dollar promote demand for U.S. soymeal, analysts said.

 

Soyoil futures matched contract highs in active contracts, with spillover momentum from rallying crude oil futures attracting speculative interest. Long range demand potential remains a supportive feature, with rising crude oil prices and tightening soybean stocks in the 2007-08 marketing year promoting demand hopes, analysts said.

 

December oil share ended at 41.13%, and the November/October crush ended at 49 3/4 cents.

 

In soymeal trades, JP Morgan bought 600 December, and MF Global bought 300 December. Sellers were scattered among various commission houses. Speculative fund buying was estimated at 3,000 contracts.

 

In soyoil trades, ADM Investor Services bought 300 December, Citigroup bought 400 December, and Fimat bought 500 December. Bunge Chicago sold 500 December, and MF Global sold 300 December. Speculative fund buying is estimated at 3,000 lots.