January 29, 2009

Chicago Board of Trade soybean futures recovered from a lower start, climbing Wednesday as Argentina weather concerns remained a dominant factor with technical buying featured also.

 

CBOT March soybeans finished 6 1/2 cents higher at US$9.82 1/2. March soy meal settled US$2.90 higher at US$311.50 per short tonne. March soyoil finished 14 points higher at 32.91 cents per pound.

 

The absence of fresh news kept traders focused on Argentina weather and with forecasts for only scattered rains for the next week, buyers re-entered the market, said Tim Hannagan, an analyst with Alaron Trading in Chicago.

 

"Argentina remains in a warm/dry La Nina event and that left traders uncomfortable with short positions amid ideas the recent rains are not sufficient enough to improve the crop," Hannagan added.

 

Meanwhile, technical buying helped futures bounce from recent setbacks on perceptions Tuesday's declines were overdone, traders said. Analysts anticipate choppy, two-sided trade will linger as contrasting weather forecasts and slower export demand due to China's absence from the market place for Lunar New Year holidays provides a level of uncertainty in the market.

 

The DTN Meteorlogix Weather forecast for the central crop belt of Argentina calls for a reduced chance for rainfall in the central Argentina crop belt compared with indications Tuesday. The pattern tends to feature chances for thunderstorms but coverage is variable with each chance. It looks like a more favorable weather pattern for Cordoba crop areas. Drought will continue for La Pampa and southwest Buenos Aires, Meteorlogix said in the forecast. The other areas are more uncertain.

 

On tap for Thursday, the U.S. Census Bureau's soybean crush report is scheduled for release at 8 a.m. EST (1300 GMT). U.S. soybean crush for December is expected to be 141.0 million bushels in the U.S. Census Bureau's monthly report, down from the November figure of 144.6 million bushels. December soymeal stocks are seen declining to 431,250 short tonnes from the 599,300 tonnes reported for November. Soyoil stocks are seen increasing to 2.692 billion pounds in the report from 2.542 billion in the previous month.

 

The U.S. Department of Agriculture will issue its weekly export-sales report at 8:30 a.m. EST. Soybean sales are estimated at 500,000 to 900,000 tonnes. Soymeal sales are projected in a range of 75,000 to 200,000 metric tonnes, with soyoil sales expected in a zero to 15,000-tonne range.

                          

                              

Soy Products

                                           

Soy product futures ended higher in unison with soybeans. Soymeal futures were supported by weather concerns for crops in Argentina and a technical recovery from Tuesday's declines, analysts said. Soyoil futures were up with the rest of the complex, with spillover support from crude oil adding support as well.

 

March oil share ended at 34.57% and the March crush ended at 64 3/4 cents.