March 25, 2009

 

CBOT Soy Review on Tuesday: Higher; Argentina strike underpinning theme

 

 

Soybean futures on the Chicago Board of Trade ended higher Tuesday, climbing on concerns that a lingering Argentina farmer's strike could further tighten U.S. 2008-09 stocks.

 

CBOT May soybeans ended 11 1/2 cents higher at US$9.67, and November soybeans settled 1 cent higher at US$8.96 1/2.

 

May soy meal settled US$4.90 higher at US$303.30 per short tonne. May soyoil finished 17 points higher at 33.27 cents per pound. The potential for increased U.S. export demand due to uncertainty about exports from Argentina served as the catalyst to underpin prices, a CBOT floor analyst said.

 

This is usually the time when world buyers shift their buying interest to South American origins, he added.

 

Argentina is the world's third largest producer of soybeans, and the global leader in meal and oil exports.

 

A quiet news front allowed for nearby contracts to quickly shake off early profit-taking pressure, as supply concerns took center stage in the absence of a definitive outside market influence.

 

The stock market hovered over the course of the day and crude oil posted only modest declines, traders said.

 

Meanwhile, the soybean market increased its inverse, as outlooks for a sizable jump in 2009 U.S. soybean acreage coupled with old crop demand potential, helping the new crop November future lose ground to nearby contracts.

 

The traditional old crop/new crop - July/November - spread widened out to a 67 1/4-cent inverse Tuesday, up from Monday's 56 1/2-cent inverse.

 

Looking ahead, with the Argentina strike playing out, traders will keep a close eye on outside financial markets for aid in determining near term direction, a CBOT floor broker said.

 

In pit trades, speculative fund buying was estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, supported by demand prospects on assumptions that a prolonged strike by Argentina farmers could aid the U.S. export picture, analysts said. Soymeal managed to gain product share at the expense of soyoil, supported by the realignment of product spreads.

 

Soyoil was pressured by spillover weakness from crude oil, but still managed to end higher despite a session filled with two-sided action, traders said.

 

In pit trades, speculative fund buying was estimated at 1,000 lots in soymeal.

 

May oil share ended at 35.42%. The May crush ended at 66 1/4 cents.