November 17, 2007

 

CBOT Soy Review on Friday: Mixed; backpedals from highs on late sales

 

 

Chicago Board of Trade soybean futures ended mixed Friday, as prices backpedaled from early highs on pre-weekend profit-taking and South American hedge pressure, analysts said.

 

November soybeans settled 1 cent lower at US$10.77 3/4 and January soybeans ended 1/2 cent lower at US$10.93 3/4. December soymeal settled US$1.20 lower at US$292.30 per short tonne. December soyoil finished 16 points higher at 44.82 cents per pound.

 

Bullish momentum engulfed the market for most of the day, with strong demand from China and supportive influences from outside inflationary markets propelling futures to new contract and 19-year highs, analysts said.

 

The theme was consistent, with speculative and technical buying holding true until a pullback in crude oil and metal futures spilled over to cap upside moves. The exhaustion of buying produced a subdued tonnee through midday.

 

However, late position squaring ahead of the weekend and next week's Thanksgiving Day holiday coupled with South American hedge selling opened the door for traders to shed length down the stretch, analysts added.

 

Nevertheless, futures remain in a bullish uptrend, with unabated buying from China, a tightening U.S. carryout, and uncertainty tied to 2008 U.S. acreage and South American production underpinning prices, a CBOT floor analyst said.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 1.296 million metric tonnes for the week ended Nov. 8. Analysts had forecast sales between 600,000 and 850,000 metric tonnes.

 

USDA also announced Friday that private exporters reported new sales of 226,000 metric tonnes of U.S. soybeans to China for delivery in the 2007-08 marketing year.

 

Through the first 10 weeks of the 2007-08 marketing year, total U.S. soybean export commitments are 14.448 million metric tonnes, down 2% from the 14.704 million reported at the same time last year, according to data from USDA. China by far is the dominant buyer of U.S. soybeans, accounting for 7.060 million tonnes of the 14.448 million totals, USDA data show.

 

The DTN Meteorlogix weather forecast said wet weather in Brazil's major soybean areas of Rio Grande do Sul and Parana will disrupt soybean planting and may force some replanting. Generally favorable conditions for planting and development continue in northern areas, notably in Mato Grosso.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative funds net buyers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal backpedaling from new contract highs down the stretch. Soymeal futures initially rallied to new highs, buoyed by solid underlying demand and firm cash basis levels. However, as in soybeans, pre-weekend profit-taking surfaced to pressure futures in late dealings, traders said.

 

Soyoil ended higher, rebounding from a midday slump on borrowed strength from crude oil futures, solid underlying demand and the unwinding of meal/oil spreads, analysts said.

 

December oil share ended at 43.40% and the December/January crush ended at 69 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, Tenco bought 300 January, Citigroup bought 1,500 December and Rand Financial bought 500 December. Fimat sold 300 December.