April 3, 2009

 

CBOT Soy Review on Thursday: Climb on speculative buys, strong export demand

 

 

Chicago Board of Trade soybean futures climbed Thursday, rekindling their bullish theme on broad-based speculative buying associated with economic optimism and strong export demand.

 

CBOT May soybeans ended 25 cents higher at US$9.77, and November soybeans settled 23 1/2 cents higher at US$9.15 1/2.

 

May soy meal settled US$3.10 higher at US$297.40 per short tonne. May soyoil finished 160 points higher at 35.10 cents per pound.

 

The rise in the outside financial markets created a buying frenzy across commodities, as outlooks for the easing of U.S. restrictions on mark-to-market accounting provided optimism for economic growth, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The Dow Jones Industrial Average climbed above the 8000 level, crude oil was US$4 a barrel higher, and the U.S. dollar was weaker.

 

Higher-than-expected weekly export sales reported by the U.S. Department of Agriculture added to the bullish tonnee, with analysts factoring in the potential for a draw-down on already tight old crop supplies if exports continue to move at a strong pace.

 

The USDA reported total weekly soybean export sales were a net 1,180,900 metric tonnes for the week ended March 26. Sales for 2008-09 were a net 599,800 metric tonnes. Analysts had forecast sales between 350,000 and 625,000 metric tonnes.

 

Export demand has not shown any signs of backing off and with weakness in the U.S. dollar, U.S. exports are more competitive to world importers, said Don Roose, president U.S. Commodities in West Des Moines, Iowa. This situation is forcing the market to add risk premium in an effort to secure adequate stocks for the rest of the marketing year, Roose said.

 

In pit trades, speculative fund buying was estimated at 6,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures climbed in unison with soybeans. Soyoil futures were the upside leader, regaining product share on spreads amid spillover strength from crude oil, strong weekly export sales and strength in world vegoil markets.

 

The USDA said weekly export sales for soymeal were a net 107,000 tonnes. Trade estimates ranged from 75,000 to 150,000 tonnes. Soyoil commitments were 62,000 metric tonnes. Analysts had forecast sales between 40,000 and 65,000 tonnes.

 

Speculative buying was featured in both soyoil and soymeal.

 

In pit trades, speculative fund buying was estimated at 1,000 lots in soymeal and 3,000 lots in soyoil.

 

May oil share ended at 37.11%. The May soybean crush ended at 63 1/2 cents.