December 21, 2007

 

CBOT Soy Review on Thursday: Settles higher; fundamental strength

 

 

Chicago Board of Trade soybean futures ended higher Thursday, finding strength from bullish underlying fundamental characteristics.

 

January soybeans settled 1 3/4 cents higher at US$11.60 3/4 and March soybeans ended 2 cents higher at US$11.79 3/4. January soymeal settled US$1.40 higher at US$325.10 per short tonne. January soyoil finished 20 points lower at 46.63 cents per pound.

 

The market remains firmly underpinned by supportive long-range fundamentals, and with tight ending stocks and bullish demand outlooks in the back of traders' minds, downside potential remains limited, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

Supportive weekly export sales and daily sales announcements helped prices as well, analysts said.

 

The weekly sales were friendly to prices, with China the primary buyer, and when a daily sales announcement of 165,000 tonnes to unknown after 145,000 tonnes were reported Wednesday are added, futures have a solid demand base, Hannagan added.

 

However, overall activity was subdued, with light profit-taking and end-of-year positioning applying mild pressure to keep futures in a consolidatory phase heading into the U.S. holidays, analysts added. The DTN Meteorlogix weather forecast said very hot weather Thursday and Friday in Argentina increases stress to crops. Scattered thunderstorms Sunday into Monday will help to ease stress; however, it is uncertain whether or not this rainfall will hit La Pampa in the south.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 165,000 metric tonnes of soybeans for delivery to unknown during the 2007-08 marketing year.

 

The USDA reported weekly soybean export sales were 929,600 metric tonnes for the week ended Dec. 13. Sales for marketing year 2007-08 totaled 872,400 metric tonnes. The sales were primarily for China with 245,200 metric tonnes, Mexico with 189,500 tonnes and South Korea with 100,000 tonnes. Analysts had forecast sales between 600,000 and 900,000 metric tonnes.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots. Tenco sold 2,000 November.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal up in unison with soybeans. Soymeal was buoyed by supportive underlying demand, position squaring and light technical buying despite routine export sales and higher-than-expected meal stocks in the Census crush report, analysts said.

 

Soyoil futures ended lower, losing ground to soymeal on spreads. The absence of fresh supportive news, end-of-year positioning and technical pressure weighed on the market after early buying was exhausted, analysts said.

 

January oil share ended at 41.76% and the January crush ended at 67 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 2,000 lots.