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$12.00 CBOT soybean prices reachable, analysts say

Agriculture.com Staff 11/14/2007 @ 10:53am

CHICAGO, Illinois--As the CBOT soybean futures surge higher, one traders comment that price changes make things interesting is proving true. $11.50-$12.00 soybeans are not out of reach, floor analysts say.

On Wednesday, the nearby Jan '08 futures contract and the March surged to all-time contract highs. China's announcement of soybean purchases, bullish acreage estimates released Tuesday by Informa, and higher crude oil have the soybean, soy oil and soymeal markets all higher.

On Wednesday, the CBOT Dec corn contract closed #3.83, Dec wheat futures 4 1/2 cents higher and the Jan nearby soybean contract closed 23 1/4 cents higher at $10.79 1/2 per bushel.

Joe Bedore, FC Stone's CBOT floor manager says the stronger prices could remain.

"All ends of the soy complex are keyed in on friendly fundamentals. With the Jan and March soybean contracts at all-time highs we really don't know where the resistance is," Bedore says.

He adds, "Resistance could come at any time. But, if we can't fix the acreage issue, beans are going to be $11.50 or $12.00."

On Tuesday, Informa pegged the U.S. 2008 soybean acreage at 68.1 million, 4.4 million more than last year.

Even with South America growing as many soybeans they can, it's not going to be enough to solve the demand, Bedore says. "We need 8-10 million more acres of soybeans in 2008 to solve the demand issue."

Vic Lespinasse, a floor trader for Illinois Grain Co. says a lot of things have to fall into place, but $12.00 soybean futures are in the cards.

"Crude oil strength has to continue, continued strong Chinese demand, and some weather problems in South America," Lespinasse says. There are a lot of hurdles but it's not inconceivable."

For example, USDA on Wednesday announced China purchased 44,000 metric tons of U.S. oil was sold to an unknown destination.

"It's widely thought that buyer is China," Lespinasse says. "The Chinese domestic food prices have been racing higher. They have a problem with inflation and want to try and tame it by importing more soybeans and more soyoil."

Lespinasse adds, "The soybean market is trading very strong today and will likely stay that way."

June 5, 1973 is the date that U.S. soybeans hit the all-time high record of $12.90 in the July futures contract.

"The market was very volatile, like today. We were only there one day then we sold off. But, those were exciting times and we may be returning to them," Lespinasse says.

CHICAGO, Illinois--As the CBOT soybean futures surge higher, one traders comment that price changes make things interesting is proving true. $11.50-$12.00 soybeans are not out of reach, floor analysts say.

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