November 24, 2007

 

CBOT Soy Review on Friday: Rallies to 34-year highs on demand, technical buys

 

 

Chicago Board of Trade soybean futures ended higher across the board Friday, rallying to 34-year highs on export demand, technical buying and outside market influences.

 

January soybeans settled 16 1/4 cents higher at US$11.00 1/4 and March soybeans ended 15 cents higher at US$11.16 1/4. March soymeal settled US$4.20 higher at US$294.20 per short tonne. December soyoil finished 72 points higher at 46.67 cents per pound.

 

The market has a supportive perspective on demand, with strong weekly export sales for both soybeans and soyoil keeping bullish enthusiasm flowing, analysts said.

 

Spillover momentum from a bounce in crude oil and metal futures provided outside market support to keep sellers on the run in quiet post holiday trade, analysts added.

 

Meanwhile, technical buying played a key role in the gains, with advances accelerating once January futures satisfied a near-term objective of eclipsing a 19-year high of US$10.99 1/2 from the 1988 drought season for a nearby contract on continuation charts.

 

Traders said the advances were able to easily extend higher in the absence of aggressive sellers, with many participants away after the Thanksgiving Day holiday.

 

The DTN Meteorlogix weather forecast said weekend temperatures in Argentina will range from above normal in the north and west to around freezing in the south. Conditions will be mostly dry through the middle of next week, and temps could climb into the 90s Fahrenheit.

 

Meanwhile, in Brazil, Rio Grande do Sul may get scattered showers, up to three-quarters of an inch, Friday night into Saturday. The states of Parana, Mato Grosso and Mato Grosso do Sul are expected to get up from a half inch to two inches of rain over the weekend. Early next week, the rain will taper off, falling only in Mato Grosso and Goias, Meteorlogix reports.

 

In pit trades, buyers and sellers were scattered among various commission houses, with ADM Investor Services a seller of 400 January. Speculative funds were estimated buyers of 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended sharply higher, with soyoil the upside leader once again. Soyoil set new contract highs again, rallying on strong weekly export demand, strength in global vegoil markets and spillover support from outside markets, particularly crude oil futures, analysts said.

 

Soymeal futures ended higher, rallying in unison with soybeans. Soymeal was a follower amid the absence of any fresh news to spark independent price strength, analysts said. The market climbed, but oil/meal spreading served as an anchor to limit upside potential, analysts added.

 

December oil share ended at 44.43% and the December/January crush ended at 53 3/4 cents.

 

In soymeal trades, JP Morgan buys 300 December and Fortis bought 600 May. Fimat sold 300 January, and Iowa Grain sold 200 December. Speculative fund buying was estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated buyers of 3,000 lots.