March 19, 2010

 

CBOT Soy Review on Thursday: Shakes off losses to end near unchanged

 

 

Chicago Board of Trade soybean futures fought against the bearish influence of the rising U.S. dollar Thursday and finished nearly unchanged after shaking off early losses.

 

Nearby May soybeans ended up 1/2 cent, or 0.05%, at US$9.59 1/2 a bushel. May soymeal rose US$2.50, or 0.9%, to US$269.90 per short tonne, while May soyoil fell 58 points, or 1.5%, to 39.25 cents a pound.

 

Short-covering and positioning helped the market recover from early selling that pulled May soybeans to a session low of US$9.47 1/4 a bushel, an analyst said. Commodity funds bought an estimated 1,000 contracts.

 

The market held up well considering the bearish influence of a rising U.S. dollar, said Jim Gerlach, president of AC Trading. A firm dollar is often seen as bearish because of perceptions that it makes U.S. grains less attractive to foreign buyers and reduces investors' appetite for risk.

 

Soybeans will likely see a firmer bias heading into the U.S. Department of Agriculture's March 31 prospective plantings report because of uncertainty about acreage, Gerlach said. May soybeans have been recovering since hitting a recent low of US$9.21 3/4 on Monday.

 

After the report, "I'd get a heck out of the way for awhile," Gerlach said. The report will remove uncertainty and risk from the market and open the door for selling, he said.

 

Intra-market spreading is likely to be a feature, with traders buying the old-crop May or July contracts and selling new-crop November soybeans, Gerlach said. Traders expect new-crop soybean production to be large, while old-crop supplies are on the tight side.

 

In other news, weekly U.S. soybean export sales of 739,100 tonnes were above expectations of 110,000 to 600,000 tonnes. The prior week had seen a net loss of 50,700 metric tonnes.

 

 

Soy Products

 

Soy product futures ended mixed as traders bought soymeal and sold soyoil in spread trades, traders said. Commodity funds bought an estimated 1,000 soymeal contracts and sold an estimated 3,000 soyoil contracts.

 

Soyoil felt additional pressure from losses in crude oil, a trader said. The markets are linked because biodiesel fuel is made from soy.

 

Weekly U.S. soy-product export sales were stronger than expected. Soymeal sales of 158,300 metric tonnes topped estimates of 25,000 to 100,000 tonnes. Soyoil sales of 18,400 tonnes beat expectations of 15,000 tonnes or less.