December 15, 2007

 

CBOT Soy Review on Friday: Up on technical buys; beans, meal set new highs

 

 

Chicago Board of Trade soybean futures ended higher Friday, managing to carve out new contract highs on technically inspired buying.

 

January soybeans settled 11 cents higher at US$11.57, and March soybeans ended 9 cents higher at US$11.75. January soymeal settled US$4.30 higher at US$325.90 per short tonne. January soyoil finished 4 points lower at 46.22 cents per pound.

 

The market is filled with bullish emotion, as technical momentum continues to push prices to contract highs, analysts said.

 

The speculative nature of the market has energized the bullish theme, with supportive underlying fundamentals leaving sellers unwilling to challenge the upward charge, said John Kleist, analyst with Kleist Ag Consulting.

 

Spillover strength from a run to new highs in soymeal, lingering worries over dryness in Argentina and increased biofuel usage potential amid the U.S. Senate's passage of new energy legislation provided further strength to underpin prices, analysts said.

 

The U.S. Senate Thursday voted to pass a scaled-back energy bill, providing new fuel-efficiency standards. Also under the legislation, 36 billion gallons of so-called renewable fuel would be blended into the fuel supply by 2022.

 

Otherwise, activity was relatively quiet with technical strength and a lack of sellers key to the markets' run to new highs, a CBOT floor analyst said.

 

The DTN Meteorlogix weather forecast said Friday's long-range charts suggest a better chance for thundershowers to develop in the western and northern crop areas of Argentina late next week or next weekend. The early indications suggest that this would include La Pampa, Cordoba, Santa Fe and northern Buenos Aires, Meteorlogix said.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Friday, with soymeal gaining product share versus soyoil. Soymeal futures carved out new contract highs once again, buoyed by technical buying, with seasonal pick up domestic demand and a solid export pace keeping buyers enthused, analysts say. The absence of any significant selling is enabling futures to extend its march to higher levels, analysts said.

 

Soyoil futures ended lower, pressured by spillover pressure from lower crude oil and palm oil futures as well as meal/oil spreading, analysts said.

 

January oil share ended at 41.36%, and the January crush ended at 68 1/2 cents.

 

In soymeal trades, JP Morgan bought 400 March and 400 May, with Fimat a seller of 300 January. Speculative fund buying was estimated at 3,000 lots.

 

In soyoil trades, JP Morgan bought 500 January and Citigroup bought 300 January. Iowa Grain sold 600 January and UBS Securities sold 300 January. Speculative fund selling was estimated at 2,000 lots.