November 30, 2007

 

CBOT Soy Review on Thursday: Higher on bullish sentiment, spillover

 

 

Chicago Board of Trade soybean futures ended Thursday's session posting modest gains, garnering strength from bullish optimism and spillover strength from wheat and crude oil futures.

 

January soybeans settled 1 1/4 cents higher at US$10.98 and March soybeans ended 1 1/2 cents higher at US$11.15. January soymeal settled US$1.00 lower at US$295.60 a short tonne. January soyoil finished 6 points higher at 46.64 cents a pound.

 

The market consolidated below contract highs, continuing to struggle against old highs, with supportive weekly export sales and crush data already factored into prices, said Dan Basse, president of AgResource Company in Chicago.

 

Futures are running into bouts of profit-taking, with fears that Chinese demand may be slowing because the country has covered its supply needs leading up to the Lunar holidays in February, Basse added.

 

However, the market remains filled with bullish optimism, as traders are unwilling to abandon their bullish stance aside from mild positioning, amid the uncertainty of South American production, strong global demand and tight U.S. ending stock projections, analysts said.

 

Spillover momentum from wheat and crude oil coupled with the market's ability to hold above technical support helped underpin prices. However, futures briefly dipped into negative territory, pulling back after wheat and crude oil futures dropped well off session highs in late dealings, a CBOT floor broker added.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 1,117,800 metric tonnes for the week ended Nov. 22. Analysts had forecast sales between 900,000 and 1,300,000 metric tonnes.

 

The U.S. Census Bureau released its monthly soybean crush report, pegging the October crush at 163.512 million bushels, up from the September crush figure of 147.7 million bushels. In a survey of analysts by Dow Jones Newswires, the average of estimates was 162.8 million bushels. October soymeal stocks were reported at 282,930 short tonnes, down from the 350,920 tonnes reported for September, as well as below the average of estimates at 333,800. Soyoil stocks came in at 3.028 billion pounds, up from September stocks of 2.909 billion, but just below the average of estimates at 3.030 billion pounds.

 

In pit trades, ADM Investor Services bought 500 January, and Tenco and UBS Securities each bought 300 January. Sellers were lightly scattered among various commission houses. Speculative fund buying is estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with late profit-taking cutting earlier gains. Soyoil futures ended mostly higher, garnering strength from crude oil gains and bullish underlying demand, analysts said. However, late profit-taking amid a pull back crude oil futures, uncovered selling down the stretch, analysts said.

 

Soymeal futures drifted lower in late dealings, pulling off earlier gains on late profit-taking. Spillover from a setback in soybeans coupled with the inability of the January futures to breach resistance at its contract high attracted selling, analysts said. Nevertheless, solid weekly export sales and lower-than-expected stocks data in the crush report provided underlying support, analysts added.

 

January oil share ended at 44.10% and the January crush ended at 65 1/4 cents.

 

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

 

In soyoil trades, buyers and sellers are scattered among various commission houses, with Bunge Chicago and JP Morgan each buyers of 300 January. Speculative fund buying is estimated at 2,000 lots.