April 10, 2009

 

CBOT Soy Review on Thursday: Up on supply/demand report; profit taking weighs

 

 

Soybean futures at the Chicago Board of Trade ended higher Thursday, underpinned by supportive supply and demand data revealing a tighter old crop balance sheet.

 

The market initially climbed to 2-month highs, but ended well off the session highs, as traders booked profits on recent gains heading into an extended holiday weekend, analysts say.

 

CBOT May soybeans ended 1 cent higher at US$10.07, and November soybeans settled 6 cents higher at US$9.22.

 

May soy meal settled US$1.10 lower at US$311.20 per short tonne. May soyoil finished 43 points higher at 35.42 cents per pound.

 

The market leaped out of the starting blocks, buoyed by a U.S. Department of Agriculture report showing lower ending stocks and increased exports. The report provided a fundamental boost to prices, while strength in the stock market and crude oil futures generated a bullish outside market influence, analysts said.

 

However, futures experienced a sharp slow down in activity after the initial push higher. Traders looked to even positions and lock in profits from recent gains, unwilling to take on added risk heading into the extended holiday weekend, analysts added.

 

CBOT markets will be closed Friday in observance of the Good Friday holiday.

 

Otherwise, spreading activity was featured, with profit taking on bull spreads trimming the markets inverse differential after a run that had taken the inverse from 58 1/2 cents to more than 90 cents in one week.

 

July/November soybean spread settled at an 80 cent inverse.

 

Looking ahead, analysts expect the market will remain on an upward path, as the absence of fresh bearish features allows traders to focus on a tight old crop balance sheet.

 

U.S. Department of Agriculture supply and demand report estimated U.S. soybean ending stocks were pegged at 165 million bushels, the lowest since the 2003-04 marketing year. The estimate is down 20 million bushels from the USDA's estimate in March, and below the average analyst estimate of 169 million bushels.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil recapturing some product share on spreads, underpinned by bullish outlooks for world vegoil demand and borrowed strength from higher crude oil futures, analysts said. Soymeal struggled to sustain price strength, retreating in unison as soybeans pulled back from early highs. Adjustments in the meal/oil spread relationship weighed on meal as well.

 

May oil share ended at 36.28%. The May soybean crush ended at 67 1/4 cents.