March 19, 2009

 

CBOT Soy Review on Wednesday: Mixed trade, old crop up on Argentine unrest

 

 

Nearby Chicago Board of Trade soybean futures finished higher Wednesday, as export potential was bolstered by Argentine unrest and weakness in value of the U.S. dollar index.

 

May soybeans added 2 cents to US$9.15. The contract traded an 11-cent range, topping at US$9.20. July gained 1 1/4 cents to US$9.11 3/4. November soybeans dropped 5 cents to US$8.56. The contract traded a 12-cent range, topping at US$8.64 1/2. Speculative funds bought 2,000 soybean lots, according to a midday estimate.

 

"Bull spreads continue to work," said John Kleist, an analyst/broker at Allendale, noting the old crop is supported by tight U.S. supplies and ideas of greater sales if protesting Argentine farmers curtail exports.

 

New crop contracts continue to find some pressure on acreage and ideas that short-term supply restrictions in Argentina will flood back on the market at a later date, Kleist said.

 

In Wednesday's two-sided trade, market participants disagreed about how aggressive China would be with U.S. purchases if Argentina's exports are curtailed, he said.

 

"We'll probably get some business, but I don't know if it will be as large as it has been," Kleist said. "If not, we haven't been doing anything with anyone else. We're just holding our own and treading water."

 

Soybeans "might be limited to the upside," Kleist said, noting the market doesn't need to draw out more near-term supply than it is currently.

 

The U.S. Department of Agriculture is due to issue its weekly export sales report Thursday at 8:30 a.m. EDT.

 

Analysts expect soybean export sales for the week ended March 12 to range from 350,000-900,000 metric tonnnes.

 

 

SOY PRODUCTS

 

The CBOT soy complex finished mixed Wednesday with soymeal gaining on soyoil.

 

May soymeal gained US$3.50, to US$289.50 per short tonnne, and May soyoil is down 39 points, to 30.92 cents per pound.

 

Funds sold 1,000 soyoil lots and were even in soymeal, according to a midday estimate.

 

May oil share ended at 34.81% and the May crush ended at 62 cents.

 

"A senior official in China was quoted as saying that China will see a shortfall in edible oil totaling 13 million tonnnes in 2009," Fortis noted in a Wednesday market commentary.

 

"On the other hand, there is talk that higher freight and weak domestic prices for meal and oil have eased crusher demand in China for imports," Fortis said.

 

Analysts expect soymeal weekly export sales to range from 75,000-150,000 metric tonnnes. Soyoil exports are seen ranging from 5,000-15,000 tonnnes.