November 1, 2007

 

CBOT Soy Review on Wednesday: Rallies on outside-market influence

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, propelling to new contract highs on the bullish influence of inflationary-based buying attributed to spillover from crude oil.

 

November soybeans settled 18 cents higher at US$10.10 and January soybeans ended 16 1/2 cents higher at US$10.25 3/4. December soymeal settled US$4.90 higher at US$279.60. December soyoil finished 63 points higher at 42.31.

 

The outside markets sparked a fire in the market, lending bullish support to lift prices in the absence of fresh fundamental news, analysts said.

 

A rise to 33-year highs in soyoil futures was another supportive feature that carried soybeans higher, analysts added. Fund buying was featured in the rise in prices, as speculative index fund buying spread across markets that are included in a basket of commodities that include a heavy concentration of energies, a CBOT floor analyst said.

 

Meanwhile, end-user buying beneath the market, a lack of aggressive producer selling, smaller-than-expected deliveries and nervousness ahead the Federal Reserves decision on interest rates added strength to keep the market firmly underpinned, traders added.

 

The U.S. Fed cut its Fed Fund Rate by 25 basis points to 4.50%.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release weekly export sales figures for the week ended Oct. 25 at 8:30 a.m. EDT. Trade estimates put soybean export sales at 400,000 to 800,000 metric tonnes. Soymeal sales are projected in a range of 50,000 to 150,000 metric tonnes, with soyoil sales expected in a range from 5,000 to 10,000 tonnes.

 

In pit trades, speculative fund buying was estimated at 7,000 lots, with ADM Investor Services a buyer of 600 January and RJ O'Brien a buyer of 500 January. Sellers were light scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy-product futures ended higher across the board, with soyoil futures commanding a dominant presence once again. Soyoil futures soared to new contract highs as well as producing new 33-year highs on spillover from new all-time highs in crude oil futures, analysts said. Speculative-based buying was a featured attraction, as inflationary-based buying sent bullish ripples through the market, analysts added.

 

Soymeal futures were dragged higher in unison with the rest of the complex, with speculative buying key. Nevertheless, the market managed to maintain its product share as late profit taking in soyoil impacted spreads, analysts said.

 

December oil share ended at 43.11% and the November/December crush ended at 72 3/4 cents.

 

In soymeal trades, Fimat bought 300 December and RJ O'Brien bought 300 January. Sellers were scattered among various commission houses. Speculative fund buying was estimated at 2,000 lots.

 

In soyoil trades, JP Morgan and Iowa Grain each bought 400 December, and Fimat bought 500 December and 400 January. Tenco sold 500 January. Speculative fund buying was estimated at 4,000 lots.