January 12, 2008

 

CBOT Soy Review on Friday: New highs; new crop soybeans limit up

 

 

Chicago Board of Trade soybean futures ended sharply higher Friday, setting new contract highs, with new crop futures soaring to their daily upper trading limits.

 

January soybeans settled 42 cents higher at US$12.86, March soybeans ended 38 1/2 cents higher at US$12.98 3/4, and November soybeans ended 50 cents higher at US$12.45. March soymeal settled US$10.40 higher at US$358.60 per short tonne. March soyoil finished 139 points higher at 52.66 cents per pound.

 

Bullish spillover momentum from limit up corn and wheat futures following the U.S. Department of Agriculture's crop reports forced new crop futures to perform in unison with the gains in other grain futures, as the battle for spring acreage rages on, said John Kleist, analyst at Kleist Ag Consulting.

 

The rolling of fund longs to deferred months amid bullish long-range fundamental outlooks helped promote bear spreading, as index funds position themselves into new crop futures for the long haul, a CBOT floor broker said.

 

Nearby futures spiked higher as well, with tightening old-crop inventories an underpinning feature, traders added. Nevertheless, new crop futures pulled nearby contracts higher, with the most active March future setting an all-time high above the US$13 per bushel level on an intra-day basis for the first time, analysts said.

 

The new crop November future was locked limit up on the close, with traders saying the market was trading 13 cents higher synthetically, with the pool of orders to buy at that level reported at 14,000 contracts on the CBOT electronic platform.

 

Meanwhile, the DTN Meteorlogix weather forecast said forecast charts for next week in Argentina and southern Brazil continue to show high pressure aloft over the region from this weekend into the middle of next week. This development will promote another round of hot, dry weather and significant crop stress. This ridge is expected to drift westward into the Pacific during the latter part of next week, allowing for some shower activity to develop, Meteorlogix said.

 

In pit trades, Tenco and RJ O'Brien were featured buyers, with speculative fund buying estimated near 9,000 contracts on the day.

 

 

SOY PRODUCTS

 

Soy product futures catapulted to new contract highs, soaring in unison with price gains in soybeans. Speculative led buying fueled advances in both markets, with soyoil rallying to all-time highs, analysts said. Bullish long-range fundamentals and broad-based speculative buying in ag commodities set the tonnee to lift soyoil prices to historic levels, analysts added.

 

Soymeal futures carved out new contract highs as well, with bullish technical momentum and underlying strong global feed demand serving as a catalyst to lift prices, analysts said. Soymeal futures remain well below its all-time highs, but upside movement has not been curtailed, as sellers are unwilling to challenge the bullish uptrend, a cash connected CBOT broker said.

 

March oil share ended at 42.34% and the March crush ended at 69 1/2 cents.

 

In soymeal trades, speculative fund buying was estimated at 4,000 lots.

 

In soyoil trades, ADM Investor Services bought 600 March, and JP Morgan bought 600 May. Commercial buying was estimated near 3,000 lots and speculative fund buying was estimated at 5,000 lots.