October 2, 2007

 

CBOT Soy Review on Monday: End up; consolidates Friday's setback

 

 

Chicago Board of Trade soybean futures ended Monday's session posting modest gains, as the market staged a light consolidative bounce from Friday's setback.

 

November soybeans settled 1/4 cent higher at US$9.91 1/2 and January soybeans ended 1 cent higher at US$10.09 1/2. October soymeal settled US$2.50 higher at US$278.80 per short tonne, and December soymeal settled US$2.80 higher at US$284.80. October soyoil ended 44 points lower at 39.05 cents a pound, and December soyoil finished 37 points lower at 39.63.

 

Spillover momentum from wheat provided an upside influence on prices, with the bullish impact of longer-term fundamental outlooks serving as catalysts to underpin prices, analysts said.

 

Continued concerns over tightening stocks, yield uncertainties, a dry start to the Brazilian planting season and the need to keep soybean prices at a level that stimulate increased acreage in South America and in the U.S. in 2008 are the fundamental sparks limiting downside risks, analysts said.

 

Nevertheless, a consolidative theme remained in place, with futures trading inside days on technical charts.

 

However, the inability of the November contract to challenge the US$10.00 level attracted speculative selling, with hedge related seasonal selling emerging at the highs to cap upside movement, analysts said.

 

The DTN Meteorlogix Weather Service forecast dry weather and said near- to above-normal temperatures continue in northern Mato Grosso, Brazil. Little change in this weather pattern is expected during the next seven to 10 days. Any significant soybean planting cannot take place until the rains arrive, Meteorlogix said.

 

The U.S. Department of Agriculture reported 11.152 million bushels of soybeans were inspected for export in the week ended Sept. 27. The figure is down 39.7% from the 18.482 million reported in the previous week. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 13 million to 23 million. Accumulated soy inspections total 49.107 million bushels, down 15.2% from the 57.894 million bushels reported at the same time last year.

 

The USDA is scheduled to release its weekly crop progress report Monday at 4 p.m. EDT. Analysts anticipate the U.S. soybean harvest at 25% to 30% complete.

 

In pit trades, buyers and sellers were scattered among various commission houses, with Fimat buying 300 November, and JP Morgan selling 400 November and 300 July.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with meal/oil spreading creating a divergence in product direction. Soymeal futures gained against soyoil, buoyed by spillover from soybeans, bullish outlooks for global feed demand and a technical recovery from Friday's declines, analysts said.

 

Soyoil futures ended lower across the board, pressured by speculative selling, with spillover weakness from crude and Malaysian palm oil futures and meal/oil spreading weighing on prices, analysts said.

 

December oil share ended at 41.03% and the November/October crush ended at 51 1/2 cents.

 

In soymeal trades, JP Morgan bought 400 December and sold 300 October. Speculative fund buying is estimated at 2,000 lots.

 

In soyoil trades, Citigroup and RJ O'Brien each bought 300 December, and Fimat bought 400 December. ADM Investor Services and Iowa Grain each sold 300 December. Speculative funds sold 2,000 lots.