May 9, 2009

 

CBOT Soy Review on Friday: Higher on technical, fundamental support, dollar

 

 

Chicago Board of Trade soybean futures settled higher Friday, underpinned by a combination of fundamental and technical strength and outside market support.

 

CBOT May soybeans ended 15 cents higher at US$11.34, July soybeans settled 9 1/2 cents higher at US$11.11 1/2, and November soybeans finished 7 1/2 cents higher at US$9.79 1/2.

 

July soymeal settled 20 cents lower at US$341.50 per short tonne. July soyoil finished 83 points higher at 39.61 cents per pound.

 

After a choppy start to the session, futures found their footing, garnering strength from tight old-crop inventories, a technical bounce from Thursday's declines and broad-based strength from higher equities, crude oil and a sharply lower U.S. dollar, analysts said.

 

The lack of any confirmation of talk circulating Thursday on China canceling cargos of previously bought U.S. supplies helped return buyers to the market as well, analysts said.

 

Shrinking production prospects for Argentina and southern Brazil were bullish features providing underpinning support as well. Traders were also positioning themselves ahead of Tuesday's supply and demand report, expected to confirm expectations of tightening old-crop inventories.

 

Meanwhile, overall activity was subdued, with traders taking a cautious approach to trading heading into the weekend.

 

However, one positive sign for market bulls was the modest rebound in the July/November bull spread, a CBOT floor analyst said. The July/November bean spread serves as a barometer of intrinsic strength in old-crop soybeans, analysts said.

 

In other news, Informa Economics on Friday projected that 2009 U.S. soybean acreage will total 78.3 million, according to traders. The soybean acreage, meanwhile, would be up 2.26 million from the USDA's March projection, and up from last year's planted acreage of 75.7 million acres.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil gaining product share on adjustments in the meal/oil spread relationship. Soyoil was buoyed by strength in crude oil futures, underlying export demand and technical buying, analysts said. Soymeal stumbled, declining on spreads as lagging domestic demand limits upside potential, analysts added.

 

July oil share ended at 36.72%. The July soybean crush ended at 75 1/2 cents.