April 4, 2009

 

CBOT Soy Review on Friday: Soybeans rally on old crop fundamentals

 

 

Bullish underlying fundamentals and technical buying combined to push nearby soybean futures on the Chicago Board of Trade to seven-week highs Friday.

 

CBOT May soybeans ended 18 1/2 cents higher at US$9.95 1/2, and November soybeans settled 7 3/4 cents higher at US$9.23 1/4.

 

May soy meal settled US$8.60 higher at US$306.00 per short tonne. May soyoil finished 22 points higher at 35.32 cents per pound. Tight old crop supplies, strong export demand and declining Argentina crop estimates continued to project a bullish fundamental picture for the market, and with sellers overly cautious, the path of least resistance remained higher, said John Kleist, broker/analyst with Allendale Inc.

 

Technical buying was featured, with speculative buying accelerating down the stretch on reports of smaller crop estimates for Argentina's soybean production, a CBOT floor broker said.

 

Traders remain optimistic for further upside price movement, with the absence of profit-taking pressure and a lack of direction from outside markets allowing fundamentals to lead prices, analysts added.

 

Meanwhile, the July/November bull spread was active, with the inverse expanding on tight old crop supplies and record projected new crop acreage.

 

In pit trades, speculative fund buying was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soymeal regaining some lost product share on spreads. Soymeal was buoyed by strength in soybeans and profit-taking on oil/meal spreads.

 

Soyoil futures ended higher, climbing down the stretch on a late push in soybeans and concerns about smaller production potential in Argentina, analyst said. Firm world vegoil prices remain an underpinning feature of the market, analysts added.

 

Argentina is the world's third-largest producer of soybeans and the global leader in soymeal and soyoil exports.

 

Speculative buying was featured in both soyoil and soymeal.

 

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

 

May oil share ended at 36.59%. The May soybean crush ended at 66 1/4 cents.