July 3, 2008

 

CBOT Soy Review on Wednesday: Soars; new highs again on late speculative buys

 

 

Chicago Board of Trade soybean futures rallied Wednesday, setting record high price levels again on bullish fundamental outlooks, technical buying and underlying weather concerns for the 2008 soybean crop.

 

July soybeans settled 17 3/4 cents higher at US$16.45 3/4 and November soybeans ended 20 cents higher at US$16.30. The nearby July future set a new high on an intra-day basis, climbing to US$16.49 3/4 on the Globex electronic system. Meanwhile, compared with last year, July soybeans are up 92.6%.

 

December soymeal settled US$8.30 higher at US$427.50 per short tonne. December soyoil finished 107 points higher at 69.45 cents per pound.

 

The market managed to overcome a consolidative theme that produced dull trading for most of the day, soaring late on speculative and technical buying, traders said.

 

The stakes are high for the 2008 soybean crop, with very tight old crop inventories leaving little room for error in 2008 production, a CBOT floor analyst said.

 

The uncertainty of weather for next week is encouraging traders to add risk premium to prices, with traders unwilling to walk back in after the three-day holiday weekend on Monday without some coverage, he added.

 

Technical buying was featured as well, with advances accelerating after prices eclipsed overhead resistance at overnight highs, traders said. Meanwhile, strength in outside inflationary markets, and ideas the market needs to continue to work at rationing demand underpinned prices, analysts added.

 

On tap for Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Trade estimates put soybean export sales at 325,000 to 525,000 metric tonnes. Soymeal sales are projected in a range of 25,000 to 125,000 metric tonnes, with soyoil sales expected in a zero-to-15,000-tonne range.

 

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

 

 

SOY PRODUCTS

 

Soy product futures spiked higher in late dealings, propelling in unison with soybean futures. Speculative led buying fueled the late surge, with soymeal futures soaring to new contract highs on a bullish demand base and worries about tight soybean supplies, analysts said.

 

Soyoil futures marched higher, with the most active December future climbing to four-month highs. The supportive influence of soybeans, and spillover from a bounce in crude oil attracted speculative buying to bolster the late charge in the market, traders said.

 

December oil share ended at 44.892% and the November/December crush ended at 74 1/2 cents.

 

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

 

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

 

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