January 31, 2009

 

CBOT Soy Review on Friday: Climb; month-end buys, weather uncertainty

 

 

Soybean futures on the Chicago Board of Trade ended higher Friday, underpinned by end-of-the-month short covering and uncertainty surrounding Argentina weather conditions.

 

CBOT March soybeans finished 9 1/2 cents higher at US$9.80. March soy meal settled US$2.30 higher at US$311.00 per short tonne. March soyoil finished 36 points higher at 32.73 cents per pound.

 

The advances were tied to month-end short-covering, allowing futures to experience a technical bounce after prices dropped 70 cents from Monday's highs, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

The market had adequately factored in recent rains in Argentina as well as forecasts for scattered showers next week, opening the door for buyers to step in, Hoops said.

 

Underlying support was also generated from analysts' reports indicating that this week's precipitation amounts and forecasted rains are insufficient to alleviate the overall stress caused to drought-damaged crops.

 

The market effectively consolidated within its recent range, with traders unwilling to take on added risk heading into the weekend amid private forecasts contrasting over rain coverage and amounts for parts of Argentina next week.

 

For the month, the most-active March future closed out January unchanged from where it started the month.

 

The DTN Meteorlogix Weather forecast for central Argentina crop areas calls for a further chance for at least some scattered thunderstorms during the next five days. The next chance for some significant shower and thunderstorm activity appears to be Monday and Tuesday of next week. Rainfall this week in some major corn and soybean areas, along with cooler temperatures, have eased crop stress. However, there remains uncertainty regarding the weather patterns during the critical soybean pod-filling month of February, with forecast models giving mixed signals, Meteorlogix said.

 

In pit trades, speculative fund buying was estimated at 3,000 lots.

 

 

Soy Products

 

Soy product futures ended higher, consolidating in unison with soybeans. Soymeal futures bounced on a combination of spillover support from soybeans, preweekend positioning amid volatile Argentine weather conditions and technical buying, analysts said.

 

Soyoil futures bounced in unison with the rest of the soy complex, garnering additional support from strength in crude oil futures amid the market's continued sensitivity to energy markets in relation to biodiesel, traders said.

 

March oil share ended at 34.48% and the March crush ended at 64 1/2 cents.

 

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