February 25, 2009

 

CBOT Soy Review on Tuesday: Climb on late bounce in outside markets

 

 

Soybean futures on the Chicago Board of Trade ended higher Tuesday, breaking out of a midsession malaise on the bullish influence of a late bounce in outside markets.

 

CBOT March soybeans gained 8 1/4 cents to US$8.81, and May soybeans settled 7 1/2 cents higher at US$8.83 1/2.

 

May soy meal settled US$1.70 higher at US$275.00 per short tonne. May soyoil finished 18 points higher at 30.80 cents per pound.

 

Futures chopped around for most of the day, struggling to find direction, with traders taking a cautious approach amid uncertain economic outlooks, said Bill Nelson, analyst with Doane Advisory Service in St. Louis, MO.

 

Traders were unwilling to take on added risk with testimony from Federal Reserve Chairman Ben Bernanke, the expected speech Tuesday night from President Barack Obama and potential developments from the Argentina farm strike meetings looming over the market, Nelson added.

 

Futures lacked any directives to aggressively push prices higher or lower, until a bounce in stock indexes, climbing crude oil futures and the weaker U.S. dollar calmed the market and attracted buyers down the stretch, traders said.

 

The DTN Meteorlogix Weather forecast for Brazil crop areas calls for generally favorable soybean crop weather. A recent trend toward less rain in the north will favor the harvest of early soybeans. However, thunderstorms are back in the region during the midweek period, with heavier amounts over Mato Grosso. Rainfall through the southern belt will favor pod-filling soybeans, Meteorlogix said.

 

Meanwhile, scattered showers across Argentina's farm belt last week helped improve the condition of the 2008-09 soybean crop, which is suffering from the effects of a severe drought, the Buenos Aires Cereal's Exchange said in its weekly crop report Tuesday.

 

The report covers the period up to Feb. 20 and does not reflect the effects of more rainfall over the weekend. However, the condition of some of the soy crop deteriorated over last week because of hot weather in the southern areas of Buenos Aires and Santiago del Estero provinces and the northern areas of La Pampa, Cordob and Santa Fe Provinces, the exchange said.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended higher, managing to carve out gains is step with soybeans. The products experienced a mixed session, caught up in the uncertainty of the economy, analysts said. The market found support from strength in outside markets. Soyoil benefitted from a bounce in crude oil as well as reports of Chinese buying interest for soyoil.

 

May oil share ended at 35.9% and the May crush ended at 60 1/2 cents.