CBOT Soy Review on Monday: Beans up on technical, fundamental support

 

 

Chicago Board of Trade soybean futures ended higher Monday, supported by bullish fundamentals and technical strength.

 

CBOT March soybeans finished 10 cents higher at US$9.87.

 

March soy meal settled US$2.00 lower at US$298.20 per short tonne. March soyoil finished 129 points higher at 35.17 cents per pound.

 

The market continues to see strong export sales and shipments, and with the demand augmented by weather concerns for Argentine crops, futures remained underpinned, said Bill Nelson, an analyst at Doane Advisory Services in St. Louis, MO.

 

Export demand is presenting a bullish argument, and sentiment that any crop threats in South America could shift further demand to U.S. shores, raising expectations of tighter ending stocks, Nelson added.

 

Meanwhile, signs of a technically mature market amid the lack of strength to extend to new highs and general commodity pressure from a higher U.S. dollar applied mild pressure to limit upside movement, analysts said.

 

Otherwise, activity remained subdued, as traders gradually filter back into the market in the first full trading week of 2009. Traders said fundamentals will continue to underpin prices, but the rebalancing of index funds later this week and technical exhaustion could place a near-term top on the market moving forward.

 

In pit trades, speculative fund-buying was estimated at 2,000 lots.

 

The DTN Meteorlogix weather forecast said there are signs on Monday's run of the computer models that a change in the weather pattern may be in store for South America during the next 7-10 days. What will create this change is a building subtropical ridge of high pressure over central Brazil, which will allow this area to dry out after a few weeks of heavy rain. This will allow for tropical moisture to be displaced southward into the dry areas of southern Brazil and central Argentina rather than being tied up over central Brazil.

 

Although some scattered light-to-moderate showers are expected in central Argentina and southern Brazil during the middle to latter part of this week, the turn to a much more active weather pattern will be during the first half of next week if these signs continue. This rain would be quite timely and beneficial for pollinating corn and developing soybeans, Meteorlogix forecasts.

 

U.S. soybeans inspected for export in the week ended Jan 1 totaled 28.713 million bushels. Analysts surveyed by Dow Jones Newswires anticipated inspections in a range of 25 million to 30 million bushels. The primary destination for the soybeans was China, which accounted for 20.906 million bushels.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil rallying to eight-week highs on borrowed strength from a bounce in energies, particularly crude oil, analysts said. Soyoil regained product share, with technical momentum and overnight strength in world vegoil markets aiding the advances.

 

Soymeal futures ended lower, succumbing to pressure from the realignment of meal/oil spreads and exhausted upside technical momentum, analysts added.

 

The March oil share ended at 37.16% and the March crush ended at 56 cents.

 

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