April 15, 2009

 

CBOT Soy Review on Tuesday:2 1/2 Month-highs set, bullish fundamentals

 

 

Soybean futures at the Chicago Board of Trade ended higher Tuesday, rising to 2 1/2-month highs on bullish underlying fundamentals.

 

CBOT May soybeans ended 14 1/2 cents higher at US$10.36, and November soybeans settled 12 cents higher at US$9.39 1/4.

 

May soy meal settled US$3.20 higher at US$316.30 per short tonne. May soyoil finished 89 points higher at 36.95 cents per pound. Bullish momentum was exuded across the complex throughout the day, with old and new crop contracts energized by a strong fundamental base. Old crop futures were buoyed by tight supply and strong export demand, while new crop months benefited from the need to secure adequate acreage to alleviate the old crop supply pinch, a CBOT floor analyst said.

 

Technical momentum added to the session's strength, with traders saying bullish fundamentals make the market's path of least resistance higher in both nearby and deferred months, he added.

 

A definitive shift in ownership of long positions by speculative funds continues to attract buyers, allowing the market to divorce itself away from the influence of weakness in outside financial markets.

 

Meanwhile, weather forecasts opening up opportunities for corn planting to expand next week in parts of the Midwest is seen reducing the threat of some corn acres switching to soybeans. Traders viewed this potential weather shift as bullish, allowing new crop futures to gain on spreads with new crop corn futures, a CBOT floor broker said.

 

Looking ahead, the bullish theme is expected to continue amid the uncertainty of acreage and old crop demand, analysts said.

 

The Nov soybean/Dec corn spread settled at US$5.14 1/2, up from US$5.08 Monday.

 

The July/November soybean spread settled at a 91 cent inverse.

 

In pit trades, speculative fund buying was estimated at 3,000 lots.

 

The DTN Meteorlogix Ag weather forecast said fieldwork progress will show the most improvement in the western Midwest next week.

 

 

SOY PRODUCTS

 

Soy product futures pushed higher, with soyoil the upside leader. Soyoil futures managed to break away from the influence of lower crude oil futures, energized by strength in world vegoil markets as Malaysian palm oil soared in overnight trade, analysts said. Soymeal was pulled higher with soybeans, but lost product share amid adjustments in the meal/oil spread relationship.

 

May oil share ended at 36.91%. The May soybean crush ended at 66 1/4 cents.

 

In pit trades, speculative fund buying was estimated at 1,000 lots in soymeal and 2,000 lots in soyoil.