March 21, 2009

 

CBOT Soy Review on Friday: Rises on Argentina, tight old-crop supply

 

 

CBOT soybean futures closed higher Friday, with the nearby May contract leading the upside on worries about tight old-crop supplies and strife in Argentina, analysts said.

 

May soybeans jumped 11 1/2 cents to US$9.52 a bushel, while July soybeans were up 9 cents at US$9.49. May soyoil rose 36 points to 32.25 cents per pound, and May soymeal jumped US$4.20 to US$300.50 per short tonne.

 

The markets felt support from ideas that a dispute between Argentine farmers and the government could shift more demand to the U.S. from South America, analysts said. Farmer unrest revolves around unhappiness with Argentina's grain export tax.

 

The leaders of Argentina's four top farm groups met Friday to consider whether to launch a new strike over the tax. Farmers sporadically blocked a key highway in Gualeguaychu, a flashpoint during four months of on-again, off-again strikes and roadblocks last year.

 

"Do you really think things are going to get better down there? No, you don't," a U.S. analyst said. "I think the psychology is they're not going to resolve it. That can only hurt exports out of the region and help our exports out of our country."

 

Signs of continuing demand from China helped boost prices, traders said. The U.S. Department of Agriculture announced private export sales of 165,000 tonnes of U.S. soybeans for delivery to China.

 

There was some positioning ahead of the USDA's March 31 plantings report with the idea that U.S. farmers need to seed more soybeans, an analyst said. The commonly accepted idea is that farmers will expand soy acres at the expense of corn, but "the fear is what if we don't plant more beans," he said.

 

"Nobody wants to be short going into that report," he said. "People do want to be long."

 

Commodity funds bought an estimated 4,000 contracts.

 

 

Soy Products

 

CBOT soy product futures finished higher with soybeans. The Argentine dispute helped support the soy complex, as Argentina is a major exporter of soymeal and soyoil, traders said.

 

Commodity funds bought an estimated 1,000 soyoil contracts and were seen as even in soymeal, traders say.