February 28, 2009

 

CBOT Soy Review on Friday: Market mixed; nearbys up on meal, short-covering

 

 

Soybean futures on the Chicago Board of Trade ended mixed Friday, with support from meal attracting end-of-the-week short-covering in nearby contracts.

 

CBOT March soybeans settled 5 1/4 cents higher at US$8.74 1/2, and May soybeans ended 3 1/2 cents higher at US$8.72. November soybeans settled 10 1/2 cents lower at US$8.27 1/2.

 

May soy meal settled US$6.60 higher at US$269.80 per short tonne. May soyoil finished 82 points lower at 31.11 cents per pound.

 

Spillover support from a bounce in soymeal futures coupled with some stabilization in equity markets after an early stumble attracted buyers to produce a choppy, two-sided session, analysts said.

 

Futures initially slipped to new lows for the current price trend, pressured by bearish economic outlooks and weakness in outside financial markets. Fears of Chinese demand switching to South American origins and the likelihood of increased new crop acreage and ending stocks set the stage for early declines.

 

However, as the day unfolded, futures found support on meal spillover, and tight nearby supplies reflective of the absence of deliveries against the March future, traders said. Lingering concerns about exports from Argentina amid the potential for unrest between the government and farmers was seen as an underlying supportive feature, a CBOT floor analyst said.

 

Meanwhile, new crop futures remained on the defensive, succumbing to bearish new crop fundamental prospects, traders added.

 

Argentina is seriously considering the nationalization of all farm trade, a source at the Production Ministry told Dow Jones Newswires Friday.

 

The government would take over the purchase of all grains and cattle produced in the country and then resell the goods for export and domestic sale under a plan being studied "at the highest levels" of government, the source said.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal emerging as the leader of the complex. Soymeal futures bounced Friday, recovering product share on a correction in the meal/oil spread relationship, traders said. Commercial buying in meal was a driver of prices, as tight nearby supplies reflective of light March deliveries pulled some end user buying off the sidelines, analysts added.

 

Soyoil futures finished lower, declining on adjustments in the meal/oil spread and weakness from crude oil futures.

 

May oil share ended at 36.57% down from Thursday's close of 37.76%. The May crush ended at 63 3/4 cents.