May 13, 2009

 

CBOT Soy Review on Tuesday: Mixed; consolidates after neutral USDA report

 

 

Chicago Board of Trade soybean futures ended mixed Tuesday, struggling to find direction during the day as consolidation appeared to be the theme.

 

CBOT May soybeans ended 7 1/2 cents higher at US$11.37 1/2, July soybeans settled 1 1/2 cents higher at US$11.17 1/2 and November soybeans finished 3 1/2 cents lower at US$9.79 1/2.

 

July soy meal settled US$2.30 higher at US$346.70 per short tonne. July soyoil finished 10 points higher at 39.68 cents per pound.

 

Choppy activity was featured throughout the session, as the absence of any surprises in U.S. Department of Agriculture's supply and demand report left futures without clear direction, analysts said.

 

Futures had rallied leading up to Tuesday's reports, but with 80% to 90% of the market's bullish features already factored into prices, soybeans lacked a spark to attract aggressive buying, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

Profit taking of prior gains applied early pressure to old crop futures. However, despite the neutral crop report, the market remains underpinned by its fundamentals and buying slowly emerged to push nearby prices into positive territory down the stretch, traders said.

 

Meanwhile, lingering uncertainty surrounding 2009 crops amid planting delays encouraged traders to add some risk premium to prices.

 

"The chances of planting progress catching up this week in the eastern Midwest at least, are slim," said DTN Ag Weather meteorologist Joel Burgio. According to Burgio, Illinois will get more rain Tuesday night and that will spread eastward Wednesday. About three-tenths to one-half inch will fall. Friday will see a repeat of that pattern, with another three-tenths to one-half inch.

 

Repositioning of old/new crop bull spreads was featured as well, with old crop contracts rebounding from early weakness to widen spreads as the day unfolded.

 

The July/November spread rebounded to US$1.38 a bushel, up from Monday's settlement of US$1.33 cents.

 

Looking ahead, the big picture long term remains bullish, but the trade maybe in a repositioning mode ahead of the upcoming growing season, Hannagan said. Traders will also monitor Asian demand, looking for signs that current prices may be beginning to ration demand, Hannagan added.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, with soyoil setting a new 7-month high on supportive demand, and spillover from crude oil. Soymeal futures edged higher, recovering from a choppy start on adjustments in the meal/oil spread relationship and fundamental support from solid export demand, analysts said.

 

July oil share ended at 36.46%. The July soybean crush ended at 81 3/4 cents.