October 18, 2008

 

CBOT Soy Review on Friday: Rises on short covering, outside markets

 

 

Chicago Board of Trade soybean futures rallied Friday, rising on speculative short-covering amid bullish outside market influences and supportive underlying fundamentals.

 

CBOT November soybeans ended 27 cents higher at US$8.94 a bushel.

 

December soymeal settled US$6.20 higher at US$258.20 per short tonne. December soyoil finished 5 points higher at 35.50 cents per pound.

 

The absence of pressure from outside equity and energy markets opened the door for futures to bounce, with higher-than-expected weekly export sales providing some fresh fundamental support to aide the advances, said Joe Victor, analyst with Allendale Inc.

 

The market was generally pleased with export demand, but outside market forces remained the key driver of prices. Sharply higher crude oil futures and a bounce in the stock market pulled buyers off the sidelines, analysts added.

 

Active contracts propelled above the psychological US$9.00-a-bushel level, with end-of-the-week profit taking from earlier losses and talk of poor yields from harvest reports adding to the session's bullish nature.

 

Otherwise, futures lacked any other fresh directives, with traders continuing to take a cautious view on market activity amid the volatile makeup of financial markets recently. The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,028,000 metric tonnes for the week ended Oct. 9. Analysts had forecast sales between 500,000 and 800,000 metric tonnes. Soymeal sales were a net 245,500 tonnes, above trade estimates ranging from 100,000 to 150,000 tonnes. Soyoil commitments were a net 16,100 metric tonnes. Analysts had forecast sales between zero and 15,000 tonnes.

 

The DTN Meteorlogix forecast said a new rain system will cross the central U.S. next week, with the Plains and the western Corn Belt in line for two or more inches of rain by Tuesday. The core of heavy rain is headed for Iowa as well. This continued wet-weather scenario promises to put a two-week hold on harvest activity in the western Midwest, Meteorlogix said.

 

In pit trades, speculative fund buying was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher Friday, up in step with advances in soybeans. The bullish influence of outside financial and energy markets buoyed futures. Soyoil ended higher, but finished well off earlier highs on meal/oil spreading and late pre-weekend position evening. Soymeal also received fundamental support from higher-than-expected weekly export sales.

 

December oil share ended at 40.74% and the November/December crush ended at 64 1/2 cents.

 

In pit trades, speculative fund buying was estimated at 1,000 lots in both soymeal and soyoil.