March 27, 2010
CBOT Soy Review on Friday: Ends up in technical bounce from losses
Chicago Board of Trade soy futures finished stronger Friday in a technical rebound from losses that was underpinned by weakness in the U.S. dollar.
Nearby May soy closed up 9 1/2 cents, or 1%, at US$9.52 a bushel. The contract ended 9 3/4 cents lower on the week.
Short-covering helped the market recover after soy fell 1.8% Thursday, traders said. Prices sank Thursday on technical selling and pressure from a firm U.S. dollar.
"You had that big upheaval yesterday," an analyst said. "The market's kind of exhausted itself for the time being."
The dollar slipped Friday, which helped support gains, a trader said. A soft dollar is often seen as supportive due to the perception that a weak greenback increases investors' appetite for risk and makes dollar-denominated commodities more attractive to foreign buyers.
Commodity funds bought an estimated 4,000 contracts.
Traders are waiting for the U.S. Department of Agriculture to issue its prospective plantings and quarterly grain stocks reports Wednesday. There should be positioning next week leading into the reports, traders said.
Old-crop demand is a potentially supportive storyline amid chatter that protests may slow soy exports from Argentina, a floor trader said. South America is expected to pick up world demand as U.S. producers are preparing to plant their next crop.
Soy Products
CBOT soy product futures finished firmer with soy in a recovery from Thursday's sell-off in the complex. The markets were due for a technical bounce, a trader said.
May soymeal closed up US$5, or 1.9%, at US$270.90 per short tonne. The advances erased losses from Thursday, when the contract fell US$5.
May soyoil finished up 0.25 cents, or 0.6%, at 38.95 cents per pound. The contact on Thursday lost 0.38 cents.
Commodity funds bought an estimated 2,000 contracts each of soymeal and soyoil, traders said. Weakness in the U.S. dollar added to the supportive tonnee for the products, they said.
