October 5, 2007

 

CBOT Soy Review on Thursday: Settles higher; rebounds from choppy theme

 

 

Chicago Board of Trade soybean futures ended higher Thursday, managing to recover from a choppy, two-sided theme on bullish underlying fundamental outlooks.

 

November soybeans settled 3 1/4 cents higher at US$9.54 1/4 and January soybeans ended 2 3/4 cents higher at US$9.72 1/4. October soymeal settled US$0.40 lower at US$265.70 per short tonne, and December soymeal settled US$1.00 lower at US$270.80. October soyoil ended 44 points higher at 38.55 cents a pound, and December soyoil finished 48 points higher at 39.18.

 

The combination of bullish attributes of tightening supply outlooks, strong demand, a lack of moisture for early planting in northern Brazil and spillover support from soyoil served as the catalysts to underpin prices, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Talk of a pickup in demand from China next week after the country returns from this week's holiday period provided some mild price support, analysts said.

 

However, prices chopped around on both sides of unchanged for most of the day, with the inability of the market to initially sustain overnight price strength coupled with a lack of any fresh market moving news setting the stage for a consolidative theme, analysts added. Seasonal pressures attributed favorable harvest conditions and reports of good yields from early harvests combined to apply mild pressure as well, analysts said.

 

Nevertheless, spillover support from firm soyoil futures, planting delays in northern Brazil, decent demand and uncertainty tied to yield potential remain underpinning features to keep prices churning higher, a CBOT floor broker said.

 

The DTN Meteorlogix Weather Service forecast said planting delays are possible in South America crop areas. The problem in Argentina will likely be wet weather, but in Brazil, planting in the soybean regions of Mato Grosso do Sul, Mato Grosso and Goias are at a standstill until rains arrive.

 

In other news, Brazil should produce between 59.3 million and 61.2 million metric tonnes of soybeans in the new 2007-08 crop, the National Commodities Supply Corp., or Conab, said Thursday. Planted area is seen between 21.1 million hectares and 21.8 million hectares, compared with about 20.8 million hectares in the 2006-07 season. Total production figures suggest another record-breaking season for Brazil soy growers, who produced a record 58 million tonnes of soy last year.

 

In pit trades, buyers and sellers were scattered among various commission houses. MF Global bought 300 November and RJ O'Brien sold 300 November. Fund buying was estimated at 2,000 lots.

 

 

SOY PRODUCTS

  

Soy product futures ended mixed, with soyoil bouncing higher, recapturing some product share. Soyoil futures ended higher across the board, buoyed by speculative and commercial buying, with spillover support from a rise in crude oil and Malaysian palm oil futures aiding the higher tone, analysts said. Solid weekly export sales and another month of strong soyoil usage for biodiesel provided fundamental strength to support prices as well, analysts added.

 

Soymeal futures ended lower, pressured by the unwinding of meal/oil spreads and weakness from large deliveries posted against the October contract by commercial firm Bunge Chicago, traders said.

 

December oil share ended at 41.98% and the November/October crush ended at 54 1/4 cents.

 

In soymeal trades, buyers were lightly scattered among various commission houses. Tenco sold 300 December and Fortis sold 400 December. Speculative funds were estimated sellers of 1,000 lots.

 

In soyoil trades, JP Morgan and Tenco each bought 300 December, with ADM Investor Services and Fimat each buying 200 December. Sellers were lightly scattered among various commission houses. Speculative fund buying was estimated at 2,000 lots.