DJ CBOT Soy Midday: Beans Set New Highs, Soyoil Soars

 CHICAGO (Dow Jones)--Soybean futures on the Chicago Board of Trade were
 posting solid gains at midday Wednesday, extending the market's uptrend on
 concerns over dry weather outlooks for the eastern belt and technically
 motivated buying. 
  
   At 11:08 a.m. CDT (1608 GMT), July soybeans were 15 1/4 cents higher at $7.05
 a bushel, November soybeans were 16 1/4 cents higher at $7.21 a bushel, just
 off its new contract high of $7.21 1/2. July soymeal was $2.80 higher at
 $223.70 a short ton, and July soyoil was 100 points higher at 24.25 cents a
 pound. 
  
   Crop concerns associated with a potentially hot, dry weather pattern forming
 in the Midwest over the next 10 days provided the fundamental spark that
 attracted fresh speculative fund buying to the market, floor sources said. A
 strong rally in soyoil added to the bullish enthusiasm flowing through the
 market as well. 
  
   "Futures have the characteristics of a classic bullish market, with any sign
 of price weakness seen as a buying opportunity to the speculative sector," said
 a CBOT commission house broker. 
  
   Futures gapped higher on technical charts, with the new crop November
 contract extending to a new contract high. Buying accelerated once resistance
 at previous highs was eclipsed. 
  
   Local and speculative buying were featured attractions, with selling interest
 limited in the face crop concerns, analysts said. It's hard to find sellers
 willing to step in front of the bullish train, as strong new and old crop
 demand profiles place a big emphasis on an above trend yield 2005 U.S. soybean
 crop. 
  
   The DTN weather forecast calls for generally dry weather during the next week
 across the Midwest. Temperatures will be in a normal to above normal range in
 the western Midwest (west of the Mississippi River) to normal to below normal
 values in the eastern Midwest. The general range during the next week will be
 low to mid 90s Fahrenheit west of Des Moines, Iowa, while east of Des Moines
 the warmest temperatures will be 85-92 degrees. 
  
   For the western Midwest, the warm and dry weather will be favorable for crop
 growth, due to adequate to surplus soil moisture, while corn and soybeans in
 the eastern Midwest will continue to struggle under the stress of dry soils and
 warm temperatures, DTN added. 
  
   In early soybean pit trades, ADM Investor Services, Calyon Financial and Fiat
 each bought 300 November, Goldenberg Hehmeyer bough 400 November and O'Connor
 bought 400 July. 
  
   On the sell side, Cargill sold 400 November, Bunge Chicago sold 200 July,
 Goldenberg Hehmeyer sold 300 July, RJ O'Brien sold 500 July and 400 November. 
  
  
 SOY PRODUCTS 
  
  
   Soymeal futures rallied in step with soybeans, garnering fundamental support
 solid underlying domestic demand. However, soyoil/soymeal spreading managed to
 limited meals upside potential. 
  
   Soyoil futures surged early Wednesday, emerging as the strongest link in the
 complex on technically inspired speculative buying. The buying pushed futures
 to nearly 3 month highs, with talk of speculative funds playing catch up in
 soyoil in regards to building long positions in relation to beans and meal
 aiding the supportive tone. 
  
   Reports of President Bush talking up the expansion of bio diesel fuel use as
 an alternative to crude oil provided underlying support as well, traders said.
 Bio diesel fuel is derived from vegetable oils. 
  
   July oil share was at 35.14%, and the July crush was at 54 cent. 
  
   In soymeal trades, Goldenberg Hehmeyer bought 300 July and Refco bought 200
 July. Refco sold 400 July. 
  
   In Soyoil trades, ADM Investor Services bought 300 January, Cargill Investor
 Services and Tenco each bought 500 July, Citigroup and Refco each bought 300
 July. Light selling was scattered among various firms. 
  
   

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