April 9, 2009

 

CBOT Soy Review on Wednesday: Ends higher; nearbys set two-month highs

 

 

Chicago Board of Trade soybeans futures climbed Wednesday, with nearby futures rising to two-month highs on bullish old-crop fundamentals.

 

CBOT May soybeans ended 16 1/2 cents higher at US$10.06, and November soybeans settled 7 1/2 cents higher at US$9.16.

 

May soymeal settled US$6.10 higher at US$312.30 per short tonne. May soyoil finished 15 points higher at 34.99 cents per pound.

 

A bullish fundamental picture continues to buoy nearby futures, with tight old-crop inventories amid strong export demand from China and shrinking Argentina yield outlooks supportive features.

 

The tight old-crop stock scenario served as an underpinning force in the market, and with outlooks for a supportive supply and demand report Thursday added in, futures had the recipe to advance, said John Kleist, broker/analyst with Allendale Inc.

 

The announcement of China buying U.S. soybeans by the U.S. Department of Agriculture was a bullish shot in the arm to keep bullish enthusiasm flowing.

 

Bull spreads were working once again, as old-crop fundamentals continued to attract speculative buying, while new-crop futures lagged behind in gains amid prospects for additional 2009 U.S. soy acreage, Kleist said.

 

July/November soybean spread settled at a 90-cent inverse.

 

Cool, wet weather conditions in the central U.S. are raising concerns about potential corn-planting delays that could eventually shift some acres to soybeans.

 

The DTN Ag Weather forecast calls for generally cool temperatures with light to locally heavy rainfall over the region during the next week to 10 days. This general trend of wet conditions and cold temperatures will likely keep field work slow.

 

In pit trades, speculative fund buying was estimated at 4,000 lots.

 

The U.S. Department of Agriculture is scheduled to release its monthly revision to supply and demand balance sheets Thursday 8:30 a.m. EDT.

 

The average of 14 analyst estimates surveyed by Dow Jones Newswires projects 2008-09 U.S. soybean ending stocks at 169 million bushels. The averages ranged from 101 million to 185 million bushels. In March, USDA projected the 2008-09 carryout at 185 million bushels.

 

USDA weekly export sales report will be released at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimate soybean sales for the week ended April 2 in a range of 450,000 to 900,000 metric tonnes. Soymeal export sales are seen between 75,000 and 175,000 tonnes, while soyoil sales are pegged between 10,000 and 20,000 tonnes.

 

 

Soy Products

 

Soy-product futures rose in unison with soybeans Wednesday. Bullish fundamental outlooks and technical strength kept futures underpinned. Soyoil garnered additional support on borrowed momentum from higher crude oil futures. Soymeal gained product share on adjustments in the meal/oil spread relationship, analysts said.

 

May oil share ended at 35.91%. The May soybean crush ended at 66 cents.