November 15, 2007

 

CBOT Soy Review on Wednesday: Settle higher; demand, outside markets buoy

 

 

Chicago Board of Trade soybean futures ended sharply higher Wednesday, spiking to new contract highs on bullish underlying demand and the supportive influence of outside inflationary markets, analysts said.

 

November soybeans settled 21 3/4 cents higher at US$10.66 and January soybeans ended 23 1/4 cents higher at US$10.79 1/2. December soy meal settled US$7.40 higher at US$292.40 per short tonne. December soy oil finished 82 points higher at 45.05 cents per pound.

 

The bullish theme engulfed the market from the outset, with an overnight drop in the U.S. dollar and strong crude oil and metal futures keeping speculative buyers enthused, traders said.

 

The gains were primarily based on demand, with fresh export sales particularly from China providing a fundamental spark to go along with the inflationary derived buying filtering in from outside markets, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Additionally, the market remains supported by longer term bullish outlooks with tightening carryout projections and the lingering backlash of reduced private acreage estimates for 2008 increasing concerns for further tightening supplies out through the 2008-09 marketing year, analysts said.

 

New highs were posted in active contracts, with the nearby November futures expiring quietly, settling at a new contract high, analysts added.

 

Meanwhile, the National Oilseed Processors Association said Wednesday its October soybean crush rate was 154.974 million bushels. That was up from the September figure of 139.8 million bushels. Soy oil stocks were reported at 2.68 billion pounds. The stocks were up from the September stock figure of 2.561 billion pounds, and above the average of estimates at 2.596 billion pounds.

 

In pit trades, ADM Investor Services bought 1,000 January, and FCStonnee bought 700 January. Speculative fund buying was estimated between 6,000 and 7,000 lots. Fimat and Rand Financial each sold 300 January.

 

 

SOY PRODUCTS

 

Soy product futures ended sharply higher, with soy oil taking on a leadership role in the products. Soy oil futures catapulted higher Wednesday, climbing just short of contract highs, as spillover support from rising crude oil futures and fresh export demand sparked bullish enthusiasm, analysts said. Speculative and commercial buying was featured, with futures continuing its inflationary push on the heels of crude oil gains and strong global vegetable oils demand, analysts added.

 

Soy meal futures ended sharply higher as well, leaping just shy of its contract highs on speculative buying. Spillover support from the rest of the complex, coupled with bullish underlying export and domestic demand underpinned prices, analysts said.

 

The U.S. Department of Agriculture announced Wednesday private export sales of 44,300 metric tonnes of soy oil for delivery to unknown destinations in the 2007-08 marketing year.

 

December oil share ended at 43.51% and the December/January crush ended at 68 3/4 cents.

 

In soy meal trades, Tenco bought 500 January and Rand Financial bought 300 March. JP Morgan sold 400 January. Speculative fund buying was estimated at 3,000 lots.

 

In soy oil trades, buyers and sellers were scattered among various commission houses, with Fimat buying 500 December. Speculative fund buying was estimated at 4,000 lots.