March 3, 2010
CBOT Soy Review on Tuesday: Soy and oil rise as meal dips
Intermarket spreading and support from firm Chicago Board of Trade soyoil futures supported slight gains in CBOT soy futures on Tuesday.
May soy closed up 1 cent, or 0.1%, at US$9.63 1/2 per bushel, below its session high of US$9.69. May soyoil finished up 30 points, or 0.8%, at 40.20 cents per pound. May soymeal dipped 10 cents, or 0.04%, to US$268.30 per short tonne.
Market participants were buying soy and selling the grains, as they did Monday, said Brian Hoops, president of Midwest Market Solutions. Traders had bought corn and sold soy in spread trades last week, and "now we're seeing a little bit of unwinding of that spread," he said.
The market is "probably going to see another day of spread unwinding" Wednesday, Hoops said. The corn/soy spread is near "normal" for now but could narrow in late March and April if corn prices rise amid concerns that wetness will delay spring planting in the U.S., he said. May corn on Tuesday ended down 1/4 cent, or 0.07%, at US$3.81 1/2.
Worries about wetness delaying the soy harvest in Brazil were a "minor supportive feature," a broker said. There are ideas that delays could keep the door open for U.S. soy export sales, although South America is expected to produce a bin-busting soy crop.
Strength in soyoil added support to soy, an analyst said. Commodity funds bought an estimated 3,000 soy contracts.
Soy Products
CBOT soy product futures closed mixed, with soyoil adding to Monday's gains and soymeal extending losses.
Soyoil felt support from gains in crude oil and optimism that the federal government will restore a tax credit for the production of biodiesel fuel, analysts said. The soy complex is linked to the energy market because more than 10% of all U.S. soy oil is turned into biodiesel fuel.
There was some buying of soyoil and selling of soymeal in spread trades, a trader said. Commodity funds bought an estimated 2,000 soyoil contracts and sold an estimated 1,000 soymeal contracts.
