April 23, 2009

 

CBOT Soy Review on Wednesday: Fundamentals propel nearby futures

 

 

Soybean futures on the Chicago Board of Trade ended mixed Wednesday, with nearby contracts continuing their uptrend on bullish old crop fundamentals.

 

CBOT May soybeans ended 8 cents higher at US$10.46, July soybeans settled 6 cents higher at US$10.39 and November soybeans finished 7 cents lower at US$9.24.

 

July soy meal settled US$3.30 higher at US$322.60 per short tonne. July soyoil finished 5 points lower at 36.38 cents per pound.

 

Bullish supply and demand tables, with strong export demand, tight ending stocks and reports of poor yields from the Argentina soybean harvest served as the fundamental drivers for the market, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

"No one wants to be short old crop soybeans with their fundamental picture, but profit taking limited advances as traders took a cautious approach heading toward Friday's expiration of options on May futures," Hannagan said.

 

New crop futures in contrast to nearby futures stumbled, pressured by uncertain weather forecasts for near term planting progress. Forecasts calling for wet conditions to linger in the Midwest after a warm, dry weekend raised fears of corn planting delays.

 

This uncertainty sparked concerns that any lingering planting delays for corn seedings could lead to additional soybeans acres, as farmers weigh the risk of lower corn yield potential versus planting full variety soybean crops, Hannagan said.

 

Looking ahead, the market may chop around heading into the option expiration, but strong export demand should keep old crop futures underpinned, Hannagan added.

 

In pit trades, speculative fund buying was estimated at 2,000 lots.

 

On tap for Thursday, the U.S. Census Bureau is scheduled to release its March crush report at 8 a.m. EDT (1200 GMT). The bureau is expected to estimate the March soybean crush at 144.2 million bushels, up from last month on an increased number of crushing days in the month.

 

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 800,000 to 1,150,000 metric tonnes. Soymeal export sales are seen between 75,000 and 250,000 tonnes, while soyoil sales are pegged between 10,000 and 55,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures were mixed, with soymeal following the lead of soybean futures. Soyoil futures stumbled in choppy action, pressured by weakness in crude oil and adjustments in the meal/oil spread relationship.

 

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

 

July oil share ended at 36.14%. The July soybean crush ended at 71 cents.