December 27, 2007

 

CBOT Soy Review on Wednesday: Rallies hard on Asian, outside markets

 

 

Chicago Board of Trade soybean futures rallied to fresh 34-year highs Wednesday on strong gains in Asian and outside markets, with technical strength and expectations for solid demand adding support, analysts said.

 

January soybeans climbed 39 3/4 cents at US$12.20 3/4 per bushel, and March soybeans soared 40 1/4 cents to US$12.39 1/2. March soy

 

meal surged US$8.60 to US$345.10 per short tonne, while March soy

 

oil leapt 166 points to 49.66 cents per pound.

 

Stronger soybean futures on the Dalian Commodity Exchange and a record high close for palm oil futures on Malaysia's derivatives exchange jump-started the rally in the soy complex, an analyst said. Firmer outside energy and metals markets contributed to the bullish tonnee, he said.

 

Soybeans have solid technical strength after climbing to historic highs in recent sessions, and March soybeans Wednesday set a new 34-year high of US$12.45 1/2 in open auction trading, exceeding the previous contract high of US$12. The market is nearing the all-time high price for soybeans of US$12.90.

 

Commodity funds bought an estimated 6,000 contracts. In pit trades, JP Morgan and Tenco each bought 500 March, while FC Stonnee and Iowa Grain each bought 200 March.

 

There are bullish expectations the U.S. will continue to see strong demand from China, said Mike Zuzolo, analyst with Risk Management Commodities. The Chinese will be "proactive" as buyers of U.S. soybeans going into the new year and will delay their traditional switch of purchases to South America, he said.

 

"They're going to stick with us," Zuzolo said of the Chinese.

 

Weekly U.S. soybean export inspections of 25.838 million bushels were at the low end of trade expectations. Analysts had predicted inspections of 25 million to 34 million. For the current marketing year to date, 410.945 million bushels have been inspected for export, compared to 472.238 million at the same time last year, according to the USDA.

 

Looking at the weather, the upper air pattern in Brazil's soybean belt for next week offers continued rainfall and wet conditions for northwestern and central Brazil, DTN Meteorlogix said in a forecast. Southern Brazil could go either way - either being included in the rain pattern dominating northern and central Brazil, or being caught up in a drier weather trend that will cover Argentina, the private weather firm said.

 

 

SOY PRODUCTS

 

CBOT soy product futures settled with strong gains amid solid fund buying and support from the stronger Asian markets, an analyst said. The firmer Dalian soybean and Malaysian palm oil markets pushed the CBOT soy products higher, he said.

 

Firmer crude oil and metals also climbed and boosted the soy complex, the analyst added. Commodity funds bought an estimated 5,000 soy oil contracts and 4,000 soy meal contracts.

 

In pit trades, Tenco bought 1,000 March soy oil, while JP Morgan and Fimat each sold 500 March soy oil. JP Morgan bought 300 March soy meal.