May 19, 2009

 

CBOT Soy Review on Monday: Recoup prior losses on fundamentals, outsides

 

 

Chicago Board of Trade soybean futures ended higher Monday, recouping Friday's losses on bullish fundamentals, outside market strength and planting uncertainties.

 

CBOT July soybeans settled 16 cents higher at US$11.46 1/2 and November soybeans finished 11 1/4 cents higher at US$9.87.

 

July soymeal settled US$8.10 higher at US$366.30 per short tonne. July soyoil finished 26 points higher at 38.16 cents per pound. In pit trades, speculative fund buying was estimated at 3,000 lots in soybeans and 1,000 lots each in soyoil and soymeal.

 

Tight old crop inventories in the face of strong export demand remains the underlying driver of prices. Improved planting weather opens the door for a pick-up in corn and spring wheat seedings, and that attracted buyers, said Tim Hannagan, an analyst with Alaron Trading in Chicago.

 

Farmers want to get their corn plantings done first, and so the open window of planting this week will benefit corn seedings first, leaving fewer opportunities to switch corn acres to soybeans, Hannagan added.

 

Technical strength, higher crude oil and equities coupled with a weaker U.S. dollar were supportive to prices also.

 

The market managed to recoup Friday's losses, but the gains were limited by positioning heading toward the long holiday weekend, with traders continuing to book profits on price rallies, analysts added.

 

Nevertheless, bullish psychology continues to filter through the market place, and with a tightening balance sheet, buyers continue to surface on price breaks.

 

The July/November spread settled at US$1.59 1/2 a bushel, up from Friday's settlement of US$1.54 3/4 cents.

 

DTN Meteorlogix said clear skies are a welcome sight in the central U.S. after weeks of rain. The eastern Midwest has been especially wet, and lack of precipitation means fields will have a chance to dry out. It may take a few days for enough dry down to let tractors back in the fields, but by the end of the week, planters are expected to be rolling.

 

In demand news, U.S. Department of Agriculture announced private exporters reported the sale of 120,000 metric tonnes of soybeans to Egypt for delivery in the 2008-09 marketing year and 116,000 tonnes of soybeans to China in the 2009-10 marketing year.

 

 

SOY PRODUCTS

 

Soy product futures ended higher with soybeans. Soymeal was the upside leader of the products, continuing its recent trend of gathering product share on spreads amid strong underlying export demand concerns about supply availability, analysts said. Soyoil despite losing ground to meal climbed as well, with spillover strength from crude oil a supportive influence.

 

July oil share ended at 34.29%. The July soybean crush ended at 79 cents.