November 27, 2007

 

CBOT Soy Review on Monday: Bounces higher as crude oil trims losses

 

 

Chicago Board of Trade soybean futures rebounded from early losses Monday and finished modestly higher as crude oil trimmed losses late in the session, analysts said.

 

January soybeans closed 3 1/2 cents higher at US$11.03 3/4, and March soybeans closed 4 3/4 cents higher at US$11.21. January soymeal rose US$1.80 to US$296 per short tonne, and January soyoil climbed 23 points to 47.30 cents per pound.

 

Soybeans stumbled during the day session under pressure from profit-taking and a pullback in crude oil, but bounced higher as crude oil futures firmed, analysts said. The CBOT soy complex has been keeping an eye on outside markets, including energy and metals, in recent weeks.

 

"The electronic trade has a crude oil chart right next to its bean chart," said John Kleist, analyst for Kleist Ag Consulting.

 

Weakness in the U.S. dollar and a continuing battle for acreage with corn were other supportive factors for soybeans, analysts said. There also was some support from ideas that unfavorable weather reduced Brazil's soybean plantings earlier in the fall, said Jerry Gidel, analyst for North America Risk Management Services.

 

Brazil has a period of mostly warm and dry weather ahead during the next week, DTN Meteorlogix said. The trend will favor soy planting and early growth of the crop, especially in the southern provinces of Rio Grande do Sul and Parana, the private weather firm said.

 

Argentina's crop weather patten, meanwhile, will turn more stressful during the week. Drier and warmer to hotter weather will begin to reduce soil moisture for crops, Meteorlogix said.

 

Export inspections of U.S. soybeans were 32.238 million bushels for the week ended Nov. 22, according to the U.S. Department of Agriculture. The inspections were slightly above trade estimates of 25 million to 30 million.

 

For the year-to-date, 281.9 million bushels have been inspected for export, down 17.6% from the 342.2 million inspected last year at the same time, the USDA said. It seems as though high soybean prices have rationed demand, except for from China, Kleist said.

 

In pit trades, Tenco bought 700 March and sold 500 January, while ADM sold 500 January and 200 March. Bunge and MF Global each sold 200 January, and Iowa Grain sold 200 March.

 

The Commodity Futures Trading Commission's weekly Commitment of Traders report is slated to be released at 4 p.m. EST. The report, regularly released on Friday, was delayed a day due to Thanksgiving.

 

 

SOY PRODUCTS

 

CBOT soy product futures finished firmer as the markets bounced with soybeans, traders said. Crude oil trimmed losses, inspiring a turnaround in the soy complex, they said.

 

Earlier in the session, profit-taking had weighed on soyoil, a floor trader added. In soyoil pit trades, Citigroup bought 300 December and 200 January and sold 100 January. Fortis bought 400 July and 200 May.

 

Lower palm oil values in overnight activity limited early buying interest in soyoil, an analyst said. Crude palm oil futures traded on Malaysia's derivatives exchange ended mostly lower Monday, after export volumes were estimated below market expectations.

 

The benchmark February contract on Bursa Malaysia Derivatives moved in a narrow range to reach an all-time intraday high of MYR3,068 a metric tonne, exceeding the previous high of MYR3,044/tonne, before a small downward correction. It ended down MYR6 at an intraday low of MYR3,038/tonne.