November 14, 2007

 

CBOT Soy Review on Tuesday: Beans rally to new highs; demand, acreage estimate

 

 

Chicago Board of Trade soybean futures ended higher Tuesday; rallying to new contract highs on bullish export demand and private acreage projections.

 

November soybeans settled 11 1/2 cents higher at US$10.44 1/4 and January soybeans ended 10 cents higher at US$10.56 1/4. December soymeal settled US$4.90 higher at US$285.00 per short tonne. December soyoil finished 23 points lower at 44.23 cents per pound.

 

Export demand underpinned the day's rally, with news of fresh sales to China and outlooks for more business on the way buoyed prices, said Vic Lespinasse, analyst with Illinois Grain.

 

Weakness in the U.S. dollar added strength as well, helping soybeans divorce itself from the weak tonnee filtering through grain and outside markets, traders said.

 

A supportive private acreage estimate from Informa Economics provided a boost to lift futures to new contract highs, with technical and speculative fund buying featured amid the market's ability to gap above Monday's highs on technical charts, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

Meanwhile, forecasts pointing toward drier conditions in Brazil's soybean belt during the next ten days raised some concerns over potential crop stress, providing underlying support to prices, Hoops added.

 

The U.S. Department of Agriculture announced Tuesday private export sales of 107,000 metric tonnes of soybeans for delivery to China in the 2007-08 marketing year.

 

Private analytical firm Informa Economics estimated 2008-09 U.S. soybean planted acreage at 68.1 million acres, traders said Tuesday. The firm's soybean planted acreage estimate is larger than the 63.7 million acres planted this year, but below its previous acreage outlook at 71.7 million.

 

The soybean crush rate for October in the National Oilseed Processors Association's monthly soybean crush report is expected to increase to about 155.8 million bushels from the previous report, according to a survey of industry analysts. NOPA's report on the October soybean crush is scheduled to be released Wednesday at 8:30 a.m. EST (1330 GMT). Estimates for the report ranged from as low as 153.5 million bushels to as high as 158.8 million bushels. NOPA soyoil stocks in October are expected to increase by 35 million pounds to 2.596 billion pounds from the 2.561 billion reported in September.

 

In pit trades, ADM Investor Services bought 600 January, and Fimat and Rosenthal each bought 500 January. JP Morgan sold 300 January, and UBS securities sold 400 January. Speculative fund buying was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal rallying in unison with soybeans. Soymeal was underpinned by technical and fund buying with market bulls encouraged by the markets gap higher move on technical charts, analysts said. The unwinding of oil/meal spreads aided soymeal's rise as well, a CBOT broker added.

 

Soyoil futures stumbled lower Tuesday, encountering profit taking pressure associated with a drop in crude oil futures, analysts said. Soyoil remains married to movements in crude oil futures, and with that markets correcting lower, buyers ran for cover, analysts added.

 

December oil share ended at 43.69% and the November/December crush ended at 69 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots. In spreads, Fimat spread 2,000 March/December.

 

In soyoil trades, Bunge Chicago bought 300 December. ADM Investor Services sold 400 December and 400 January, Iowa Grain sold 400 December, and UBS Securities sold 300 December. Speculative fund selling was estimated at 2,000 lots, and commercial selling was estimated at 1,000 lots.