May 1, 2009

 

CBOT Soy Review on Thursday: Extends recovery; demand, technicals underpin

 

 

Chicago Board of Trade soybean futures rallied Thursday, continuing their recovery from prior lows on strong demand and technical strength.

 

CBOT May soybeans ended 36 cents higher at US$10.70, July soybeans settled 30 cents higher at US$10.55 and November soybeans finished 11 cents higher at US$9.43 1/2.

 

July soy meal settled US$10.20 higher at US$330.50 per short tonne. July soyoil finished 78 points higher at 36.51 cents per pound.

 

Bullish technical momentum energized the soy market, with strong weekly export sales data and declining Argentina crop estimates adding fundamental support to generate upside movement, analysts said.

 

Speculative buying was a featured attraction, particularly in old crop contracts. Buying interest accelerated once the most-active July future pushed above resistance at the contract's 200-day moving average.

 

The absence of fresh bearish news held sellers at bay during the day aside from some midday profit-taking and farmer selling, traders said.

 

A tight old crop balance sheet remains the key driver of prices, with higher-than-expected weekly export sales the featured input energizing bullish enthusiasm. Traders said the market is attempting to push values to levels that will curtail some demand on tight old crop stocks.

 

New crop futures advanced as well, but lost ground on bull spreads as lingering planting delays in the Midwest continued to raise fears of corn acres shifting to soybeans, analysts added.

 

The July/November spread widened to US$1.11 1/2 a bushel, up from Wednesday's settlement of 92 1/2 cents.

 

In pit trades, speculative fund buying was estimated at 5,000 contracts.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,170,100 metric tonnes for the week ended April 23. Sales for 2008-09 were a net 834,600 metric tonnes.

 

 

Soy Products

 

Soy product futures climbed in unison with soybeans. Soymeal futures climbed on a combination of tight nearby inventories and strong export demand, analysts said. Soyoil gains were fueled by strong weekly export sales, strength in world vegoil markets and firmer crude oil futures for most of the day. However, soyoil lost product share to meal on spreads as lagging demand from the biodiesel industry weighs on domestic demand, analysts said.

 

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

 

July oil share ended at 35.65%. The July soybean crush ended at 73 3/4 cents.

 

Soymeal weekly export sales were a net 293,100 tonnes, with 2008-09 sales of 293,000 a marketing-year high. Soyoil commitments were 36,600 metric tonnes. Analysts had forecast sales between 5,000 and 20,000 tonnes.