March 11, 2009

 

CBOT Soy Review on Tuesday: Gains posted as stock market austained rally

 

 

Chicago Board of Trade soybean futures posted gains but retreated from Tuesday's highs as crude oil swung to a loss and the U.S. dollar's weakness began to moderate, traders said.

 

May soybean contracts finished up 8 cents a bushel to close at US$8.89, after trading above US$9 and piercing the 20-day moving average at US$8.93. The contract traded a 16-cent range, topping at US$9.02. July soybeans added 12 cents to close at US$8.77. It spread a 19-cent range, topping at US$8.93.

 

Midday estimates pegged speculative fund buying at 3,000soybean contracts.

 

"The financial picture is still key," a CBOT floor trader said. "Strength in stocks was enough to sustain us today."

 

Still, he added, gains in the agricultural complex moderated as crude oil swung to a loss and the U.S. dollar index showed less weakness.

 

"The funds still hold a hefty short position," the trader said, adding he expects the trade to stay range-bound in the near term.

 

The U.S. Department of Agriculture is scheduled to release updated supply and demand tables at 8:30 a.m. EDT (1230 GMT) Wednesday. The average trade forecast from the 13 analysts surveyed by Dow Jones Newswires pegs 2008-09 U.S. ending stocks at 200 million bushels. The forecasts ranged from 177 million to 220 million bushels. In February, the USDA projected the 2008-09 carryout at 210 million bushels.

 

"The downtrend line [for soybeans] remains in force, but the relative-strength index is in a very oversold condition, suggesting a near-term bounce may be at hand," said financial adviser Shawn Hackett in his most recent Money Flow Report.

 

But "such breakdowns are not reminiscent of the kind of dynamic money flow measures one typically sees in advance of a big bean market rally," he added.

 

"Caution is warranted at this time" given expectations of a likely increase in acreage, he said. "It is very hard to get too excited about the upside prospects for beans without a U.S. weather problem."

 

 

Soy Products

 

The CBOT soy complex finished on the upside Tuesday, in line with gains logged in the agricultural commodities complex and equities.

 

May soymeal gained US$6.30 to US$271.30 a short tonne and May soyoil added 22 points to 30.98 cents a pound.

 

Speculative funds bought an estimated 1,000 soymeal and soyoil lots, according to midday estimates.

 

May oil share ended at 36.34% and the March crush ended at 60 3/4 cents.