March 9, 2010

 

CBOT Soy Review on Monday: Higher; bounce from last week's lows

 

 

Chicago Board of Trade soy futures finished higher Monday, staging a modest bounce from last week's declines, as traders covered short positions ahead of Wednesday's supply and demand reports.

 

CBOT March soy ended 5 3/4 cents, or 0.62%, higher at US$9.40 1/2, and May soy settled 5 1/4 cents, or 0.56%, higher at US$9.48.

 

The absence of fresh fundamental news to direct prices left futures in a consolidative phase.

 

"After settling at the low end of a recent trading range last week, market shorts booked profits in an effort to reduce risk exposure in case of a bullish surprise in Wednesday's U.S. Department of Agriculture reports," said Tim Hannagan, analyst with P.F.G. Best.

 

Technical buying was featured as well, with oversold conditions and exhausted selling generating buying interest after futures failed to challenge last week's lows.

 

Overall activity was light, with the limited amount of new items to affect prices keeping many participants on the sidelines.

 

Outside markets provided mixed signals for prices, with an early slide in the U.S. dollar and firmer crude oil futures reversing direction by midsession.

 

Speculative funds were estimated buyers of 3,000 lots in soy, 1,000 lots in soymeal and 2,000 lots in soyoil. Fund activity is a measure of investment money flow in the market.

 

The U.S. Department of Agriculture is scheduled to release its March supply and demand revisions Wednesday at 8:30 a.m. EST (1330 GMT). USDA is expected to tighten its March U.S. soy supply and demand tables, with alterations to exports and crush projections trimming ending stock forecasts.

 

 

Soy Products

 

Soy product futures bounced in unison with soy, recovering from last week's setback. Soyoil futures led the products higher once again, continuing to gain overall value in the soy crush versus soymeal on spreads. Soyoil benefited from the narrowing of the differential between soyoil and crude palm oil prices and slowing demand for U.S. soymeal, analysts said.

 

Soymeal futures ended higher, rising on consolidative buying following prior losses. However, slowing demand and expected competition from South America limited upside potential.

 

March soymeal settled US$1.60, or 0.62%, higher at US$259.50, and the May contract rose US$1.00, or 0.39%, to US$258.70 per short tonne. March soyoil rose 23 points, or 0.58%, to 39.95 cents per pound, while the May contract settled 23 points, or 0.57%, higher at 40.28.

 

May oil share was 43.76% while the May soy crush ended at 64 1/4 cents.