May 7, 2009

 

CBOT Soy Review on Wednesday: Maintains bullish theme on fundamentals

 

 

Soybean futures on the Chicago Board of Trade rallied Wednesday, maintaining a bullish trend on supportive fundamentals.

 

CBOT May soybeans ended 19 cents higher at US$11.35, July soybeans settled 17 cents higher at US$11.18 and November soybeans finished 17 1/2 cents higher at US$9.78.

 

July soy meal settled unchanged at US$345.00 per short tonne. July soyoil finished 99 points higher at 38.98 cents per pound.

 

Tight old crop stocks in conjunction with strong Chinese demand and shrinking Argentina crop outlooks were bullish drivers keeping prices firmly underpinned, analysts said.

 

Technical buying was featured, with the absence of fresh bearish news helping sustain the advances.

 

However, despite futures carving out double-digit gains, active contracts remained within a sideways trading range for the week on technical charts.

 

"No one wants to be short heading into next week's supply-and-demand report that's expected to reveal bullish adjustments to the U.S. and world balance sheet," said Tim Hannagan, an analyst with Alaron Trading in Chicago.

 

However, the fundamentals are old news and it is tough to get traders to overbuy the market on old issues, resulting in range-bound trade, Hannagan said. Traders continued to take profits near the top of the range, while buyers surfaced as prices drift, he said.

 

The July/November spread stabilized Wednesday, with the uncertainty of plantings in the Midwest during the next week taking some pressure off new crop futures. The July/November soybean spread settled at US$1.40 a bushel, down slightly from Tuesday's settlement of US$1.40 1/2.

 

On tap for Thursday, the U.S. Department of Agriculture weekly export sales report is scheduled to be released at 8:30 a.m. EDT, and analysts surveyed by Dow Jones Newswires estimate soybean sales for the week ended April 30 in a range of 500,000 to 900,000 metric tonnes. Soymeal export sales are seen between 125,000 and 225,000 tonnes, while soyoil sales are pegged between 10,000 and 25,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil gaining product share at the expense of soymeal on spreads. The combination of higher crude oil and world vegoil prices served as catalysts to underpin futures, analysts say. Technical buying was featured in soyoil as well.

 

July oil share ended at 36.09%. The July soybean crush ended at 69 3/4 cents.