November 3, 2007

 

CBOT Soy Review on Friday: Stronger outside markets support gains

 

 

Strength in outside markets, particularly crude oil, pulled Chicago Board of Trade soybean futures higher Friday, traders and analysts said.

 

November soybeans rose 11 cents to US$10.01 3/4 per bushel, and January soybeans finished 10 1/4 cents higher at US$10.16 3/4. December soyoil closed up 57 points at 42.64 cents per pound, and December soymeal settled up US$1.90 at US$274 per short tonne.

 

Commodity funds bought an estimated 3,000 soybean contracts as the market found direction yet again from crude oil and metals, floor traders said.

 

In the outside markets, crude oil futures touched US$95 a barrel, boosted by strong U.S. jobs numbers. Spot gold, meanwhile, broke above the key technical level of US$800 a troy ounce, a figure not hit since January 1980, as continued dollar weakness and inflation fears propel the precious metal higher.

 

Weakness in the U.S. dollar was seen as another early, supportive factor, traders said. A softer greenback gives foreign importers more buying power.

 

The markets also felt a boost from some short covering after a weaker close Thursday. Soybeans stumbled Thursday under pressure from weakness in crude oil, traders said.

 

Prices rose with crude oil Friday even though new, private estimates indicated the 2007-08 U.S. soybean crop is larger than previously thought.

 

The new projections could be seen as bearish, but "it just seems like the market's really tied in to crude oil," said Bill Nelson, associate vice president of AG Edwards & Sons.

 

Analytical firm Informa Economics estimated production at 2.628 billion bushels with a yield of 41.8 bushels per acre, while brokerage firm FC Stonnee put production at 2.651 billion bushels with a yield of 42.2 bushels per acre. The U.S. Department of Agriculture in October estimated the crop at 2.598 billion bushels with a yield of 41.4 bushels.

 

Row crop harvest in the U.S. will wrap up for many farmers this weekend, DTN Meteorlogix said, with forecasts calling for no significant rainfall in growing areas during the next seven to 10 days. The general tonnee during the first full week of November is one of cooler weather, but chillier conditions are not seen as concern for soybeans because harvest is already far along, Meteorlogix said.

 

The USDA said 84% of the U.S. soybean crop was harvested at of Oct. 28. An update on the harvest progress is due at 4 p.m. EDT on Monday.

 

"With crops well advanced in the harvest phase, the prospect of some colder weather doesn't pose a significant threat to agricultural interests," Meteorlogix said.

 

In southern Brazil, moderate to heavy rainfall during the last few days is maintaining abundant soil moisture for soybeans, Meteorlogix said. Northern soybean areas will see showers and thundershowers Friday through Sunday, except in western Bahia, where it will continue mainly dry and mainly very warm, the firm said.

 

In other news, deliveries posted against the Chicago Board of Trade November soybean future were 28 contracts Friday. Issuers included the customer account of RJ O'Brien, which issued 25 contracts, and the customer account of ADM Investor Services, which issued 3 contracts.

 

The customer account of RJ O'Brien stopped all 28 contracts. The last trade assigned was Oct. 16

 

 

SOY PRODUCTS

 

CBOT soy product futures followed crude oil higher, traders said. Soyoil was seen as a leader, one trader added.

 

The Census Bureau reported soybean oil stocks were 2.912 billion pounds at the end of September, the official ending stocks total for the soybean oil crop year. In August, the bureau pegged stocks at 3.046 billion pounds, and some traders said the decline was bullish.

 

Commodity funds bought an estimated 3,000 soyoil contracts and 2,000 soymeal contracts. In soyoil pit trades, Fimat bought 300 December and sold 200 December, while Iowa Grain sold 300 December. In soymeal trades, Fimat bought 300 December and sold 100 December.