April 16, 2009

 

CBOT Soy Review on Wednesday: Mixed; late setback on profit-taking

 

 

Chicago Board of Trade soybean futures ended mixed Wednesday, with prices pulling back from intraday highs down the stretch on profit-taking from prior gains.

 

CBOT May soybeans ended 1 cent lower at US$10.35, July soybeans settled 1 1/4 cent higher at US$10.31 1/2 and November soybeans finished 3/4 cent higher at US$9.40.

 

May soy meal settled US$1 higher at US$317.30 per short tonne. May soyoil finished unchanged at 36.95 cents per pound.

 

The market experienced choppy two-sided action, stumbling initially on profit-taking from a multi-week uptrend and early weakness in outside markets, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Futures quickly regained their footing, rallying to new 2 1/2-month highs on bullish underlying fundamentals, with Chinese buying interest on top of tight old crop stocks and shrinking Argentina production prospects underpinning prices.

 

Supportive fundamentals for both old and new crop futures kept the path of least resistance higher. However, profit-taking in the US$10.40 to US$10.45 area basis May futures uncovered selling interest to send some recent buyers running for cover heading down the stretch, Scoville said.

 

Nevertheless, the underlying fundamental theme of the market continues to paint a bullish picture moving forward. Tight old crop carryout forecasts, strong export demand, shrinking Argentina production prospects and stronger world demand for edible oil serve as catalysts to keep old crop contracts underpinned in the absence of definitive moves in outside markets.

 

New crop futures remain buoyed by the need for a strong increase in 2009 production to offset tight supplies carrying over from the 2008-09 marketing year.

 

In pit trades, speculative fund buying was estimated at 1,000 lots.

 

On tap for Thursday, the U.S. Department of Agriculture 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 9 in a range of 400,000 to 850,000 metric tonnes. Soymeal export sales are seen between 75,000 and 175,000 tonnes, while soyoil sales are pegged between 5,000 and 20,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with both markets experiencing choppy two-sided action. Profit-taking on recent price action failed to provide strong momentum for futures, with soyoil influenced by light pressure from crude oil and some unwinding of oil/meal spreads, analysts said. However, bullish world vegoil demand remains an underpinning feature.

 

May oil share ended at 36.82%. The May soybean crush ended at 69 1/2 cents.

 

In pit trades, speculative fund buying was estimated at 500 lots in soymeal.