January 17, 2009

 

CBOT Soy Review on Friday:Climb; weather, demand buoy prices

 

 

Soybean futures at the Chicago Board of Trade ended higher Friday, buoyed by bullish weather outlooks for Argentina crops and underlying Chinese demand.

 

CBOT March soybeans finished 25 1/2 cents higher at US$10.20. March soy meal settled US$11.00 higher at US$316.00 per short tonne. March soyoil finished 19 points higher at 34.59 cents per pound.

 

Concerns about crop losses in Argentina due to lingering dryness coupled with carryover strength from strong export sales to China served as the fundamental catalysts to propel prices, said Joe Victor, analyst with Allendale Inc. in McHenry, Ill.

 

A lack of cash movement attributed to arctic U.S. Midwest weather, technical strength and a sagging U.S. dollar added strength to maintain the market's bullish tonnee throughout, traders said.

 

Technical buying was featured as well, with pre-weekend short covering adding strength, as traders positioned themselves ahead of a long holiday weekend with stressful weather outlooks on tap for parched Argentina crops next week, Victor added.

 

The DTN Meteorlogix weather forecast for central Argentina remains mostly dry. Dry weather and episodes of hot temperatures increase stress on pollinating corn and developing soybeans and sunflowers. Some showers and thunderstorms are expected over the weekend but not enough to provide significant relief to crops. Mostly dry conditions and above- to much-above-normal temperatures are indicated for next week.

 

Monday is the Martin Luther King, Jr. holiday. Soy complex markets will be closed Sunday night and during the day Monday, and will reopen for electronic trading at 7:00 p.m. EST Monday.

 

Looking ahead, nearby soybeans are seen consolidating within a wide US$9.60-to-US$10.60 price range, but the top end of the range could be violated if weather remains stressful for Argentina crops after a long holiday weekend, Victor said.

 

Meanwhile, private analytical firm Informa Economics on Friday pegged 2009 U.S. soybean plantings at 80.8 million acres, according to traders. In December, Informa pegged 2009 soybean acres at 81.5 million. The U.S. Department of Agriculture will issue its first 2009 soybean acreage estimates on March 31.

 

USDA announced Friday private export sales of 125,000 metric tonnes of U.S. soybeans for delivery to unknown destinations in the 2008-09 marketing year, and export sales of 116,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soymeal futures the upside leader. Soymeal climbed to nearly four-month highs on intensified concerns about Argentina's soybean crop, a CBOT floor analyst said. The market was also bolstered by technical buying, as prices nudged above the week's previous high.

 

Soyoil futures ended higher, but emerged as the weakest link in the complex. Meal/oil spreading and weakness in crude oil futures dampened upside momentum, analysts said.

 

March oil share ended at 35.37% and the March crush ended at 55 3/4 cents.