For the third consecutive session soybeans set new contract highs. Jan Soybeans ended Tuesdays session by 9 ¾ cents. Once again this was a meal led rally which ended up $4.30 and new contract highs and oil also ended higher but lost product share. Traders say Beans climbed to new 34 year highs on supportive data from the USDA and news that the US Senate will vote in favor of an amendment to the farm bill that would require the production of 36 bil. bal. of biofuels by 2022 which is approximately 5 x this years output. Volume was heavy on Tuesday 170,887 Soybeans traded, Soybean oil traded 70,216 and Meal traded 68,043. Funds bought an estimated 4,000 Soybeans, 3,000 Meal and 2,000 Oil.
Early Opening calls are lower. In early trading Crude oil is up over $ 1.00 and the US dollar is slightly higher. A report issued by Goldman Sachs which revised its 12-month price forecast for commodities and their 2008 Crude oil projection is up to $ 95.00 per barrel vs. its previous estimate of $ 85.00 They also raised their 2008 Soybean projection price to $14.50 vs. the previous estimate of $9.00. China's central bank governor told reporters that China Supports a strong Dollar. Traders say that they expect the market to be pressured slightly on the open due to a potential for profit taking from the recent gains. However expectations are for the market to underlying support from forecasts for a rapid drawdown in U.S. soy ending stocks next year. Reports from western Argentina show the soybean crop is being stressed by dryness and periodic hot conditions while rainfall this week in Brazil's Rio Grande do Sul crop region eased stress on crops. Talk of a high probability that China becomes more active in the cash markets for soybean oil with the recent price break. Reports ouf of China show that food and fuel costs are driving China's inflation higher. Spending on meat poultry and eggs jumped 45% in November from a year earlier. Overnight Chinese Soybean, Meal, and Oil Closed lower. Malaysian Palm oil futures closed lower.
Early Opening Calls: 3-5 lower for Soybeans, Meal .50 to $1.00 lower. Oil .10 to .20 lower.
Top News
-- Oilseed crop in the EU during 2007/08 estimated at 24.61 mln mt, up 0.4 mln mt from 2006/07, acc. to EU's COPA-Cogeca
-- Chinese press cites deputy ag official offering pessimistic outlook of avian flu outbreaks this winter & upcoming spring. The official said radical change is needed to throughout the entire poultry supply chain in prevention & containment.
-- Avian flu worries in China holding down demand for Corn in state reserve auction, despite the low demand at this week's auction Chinese officials still plan a Dec 18th sale of 500k mt of Corn from reserves again.
-- Dalian Sept Soybean futures fell 29 to 4428 yuan/mt; May soymeal futures were off 21 yuan to 3411 yuan/mt; Soyoil futures were 38 lower to 9490 yuan/mt in overnight trading
-- UNICA of Brazil estimates that country's production of cane based ethanol at 19.7 Bln L (5.2 bln gal) in 2007/08 vs the 18.8 Bln L (4.99 bln gal) seen in 2006/07
-- Malaysian Palm February contract was down 3 ringgit at 2,877 ringgit ($868) a tonne.
-- eCBOT Soybean Vol. 118,214; Pit Vol. 45,898; Open Interest Change: -1,986
-- Weather:6-10 Day Forecast: Above Normal Temps. Above Normal Precip. The Corn Belt will be mostly dry today and Thursday. Friday and Saturday may see some rain and snow favoring southern areas. Temps normal to below.
-- Outside markets. Energy +.68 at $90.70; Gold & Silver: -2.70 at $811.60 & -.145 at $14.55 ; US $ lower vs. the Euro, higher vs. the Yen
Cash Markets
-- CIF Soybeans off 1-5. Dec. +28 to +40, Jan. +42 to +44, Feb. +36 to +41, Mar. +35 to +40, Apr. +34 to +36, May +34 to +38, J/J +39 to +43.
Nate Smith
SMS Brokerage
nsmith@jerrygulke.com
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
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