May 22, 2009

 

CBOT Soy Review on Thursday: End higher; tight stocks buoy market

 

 

Soybean futures at the Chicago Board of Trade ended higher Thursday, bouncing back from an early price correction, as bullish underlying fundamentals continued to buoy the market.

 

CBOT July soybeans settled 6 cents higher at US$11.75 and November soybeans finished 9 cents higher at US$10.23 1/2.

 

July soy meal settled US$4.40 higher at US$379.20 per short tonne. July soyoil finished 39 points lower at 37.98 cents per pound. In pit trades, speculative fund buying was estimated at 4,000 lots in soybeans, while selling was estimated at 1,000 lots in soyoil.

 

The soybean market and its tight old crop stocks have had corrections before, but none of them have shown a top in the market, said John Kleist, broker/analyst at Allendale Inc. in McHenry, Ill.

 

Futures had a tepid response from sellers on the early profit taking correction, as strong weekly export sales served as a reminder that export business remains beneath the market, despite recent price rallies, Kleist said.

 

Concerns about the tight availability of soybean and soymeal supplies remain a driver of prices, but light profit taking and weakness in outside markets managed to apply mild pressure.

 

Periodic waves of profit taking in both flat price and spreads continue to generate brief periods of price weakness, but the market's tight old crop stock situation promises to keep the volatile, bullish theme flowing, analysts said.

 

The July/November spread settled at US$1.51 1/2 a bushel, down from Wednesday's settlement of US$1.54 1/2 cents.

 

In demand news, the U.S. Department of Agriculture reported total weekly soybean export sales were a net 1,367,600 metric tonnes for the week ended May 14. Sales for 2008-09 were a net 700,600 metric tonnes. Analysts had forecast sales between 500,000 and 850,000 million metric tonnes.

 

The DTN Meteorlogix weather forecast said during the next five to ten days, rainfall will move across the Midwest from west to east, through May 27. Following that round of rainfall, a turn to drier weather with mild temperatures is now indicated for the latter half of next week. This drier pattern will favor corn and soybean planting, Meteorlogix said.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal rising on strong underlying export demand. The export sales for meal renewed interest in the meal/oil spread relationship, allowing meal to grab product share once again, said Allendale's John Kleist.

 

Soyoil futures stumbled, retreating on meal/oil spreading, weakness in crude oil and palm oil as well as lower than expected weekly export sales, analysts said.

 

July oil share ended at 33.35%. The July soybean crush ended at 77 cents.