April 25, 2009

 

CBOT Soy Review on Friday: Up on outside markets, fundamentals support

 

 

Soybean futures on the Chicago Board of Trade ended higher Friday, finding support from outside markets and underlying demand fundamentals.

 

CBOT May soybeans ended 2 1/2 cents higher at US$10.40 1/4, July soybeans settled 2 cents higher at US$10.34 and November soybeans finished 9 3/4 cents higher at US$9.33 1/4.

 

July soy meal settled 50 cents higher at US$318.30 per short tonne. July soyoil finished 15 points higher at 36.65 cents per pound.

 

The strength of outside macro markets, with equities and crude oil higher along with weakness in the U.S. dollar served as a bullish spark to offset consolidative sales, analysts said.

 

Fundamental strength remains the key driver underpinning prices, with tight old crop supplies, strong export demand and Argentina crop woes limiting selling interest, analysts said.

 

Futures experienced choppy activity initially, with prices testing both sides of unchanged levels, as traders looked to book profits and even some positions after a seven-week run to higher levels.

 

The upward tonnee was subdued, as market bulls have run into some "headwinds" at higher price levels, signaling buying exhaustion near recent highs, said Vic Lespinasse, analyst at Grainsanalyst.com.

 

Otherwise, the unwinding of some bull spreads was featured, with deferred months gaining on nearby contracts on ideas prior gains in the spread were overdone. Looking ahead traders are a little cautious of stalled upside momentum, and with bull spreads losing strength a minor price correction may not be out of the question, Lespinasse said.

 

The July/November bull spread settled at US$1.00 3/4, down from Thursday's US$1.08 1/2 closing price.

 

 

SOY PRODUCTS

 

Soy product futures ended higher Friday, climbing in unison with advances in soybeans. Soyoil futures were strongest leg of the products, buoyed by strength in crude oil futures and underlying export demand, traders said. Soymeal edged higher, but remained in a consolidative phase.

 

July oil share ended at 36.53%. The July soybean crush ended at 69 1/2 cents.