May 27, 2009

 

CBOT Soy Review on Tuesday: Rally on bullish fundamentals

 

 

Chicago Board of Trade soybean futures settled higher Tuesday, managing to rally after an initial profit-taking setback on bullish underlying fundamentals.

 

CBOT July soybeans settled 19 1/2 cents higher at US$11.85 1/2 and November soybeans finished 11 cents higher at US$10.42 1/2.

 

July soymeal settled US$15.00 higher at US$390.00 per short tonne. July soyoil finished 35 points lower at 37.75 cents per pound. In pit trades, speculative fund buying was estimated at 5,000 lots in soybeans and 1,000 lots in soymeal, while selling was estimated at 1,000 lots in soyoil.

 

Tight old-crop stocks, and firm cash markets coupled with solid export demand served as buoying factors to lift prices after early weakness failed to attract follow-through selling, analysts said.

 

Technical strength added to the gains, with speculative buyers surfacing after the most active July futures eclipsed resistance at Friday's high, a CBOT floor analyst said.

 

New-crop futures ended higher as well, garnering support from ideas that improved Midwest planting outlooks will limit the amount of corn acres that could shift to soybeans.

 

Futures started the session on mixed footing, struggling amid the unwinding of bull spreads, and mixed signals from outside markets. However, as the day unfolded, a reversal of early strength in the U.S. dollar, a spike in stock indexes, solid export inspections, firming cash prices and strength in soymeal opened the door for speculative buyers to step in, a CBOT floor analyst said. Speculative funds are long CBOT soybeans, adding length in the last week.

 

Meanwhile, T-storm Weather LLC said rain is on tap for the central and eastern corn belt through Wednesday. Drier weather follows the rains for most of the corn belt from Thursday through Sunday. The corn belt will become wetter next week after four to five days of drying, with substantial nighttime thunderstorm clusters remaining a decent possibility beginning Monday of next week and continuing through the middle of next week, T-storm Weather forecast.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT. The report is normally released on Monday, but was delayed by the Memorial Day holiday. Analysts anticipate soybean plantings in a range of 45% to 50% complete.

 

USDA reported U.S. soybeans inspected for export in the week ended May 21 totaled 16.993 million bushels, up 4.6% from the previous week's 16.250 million. The primary destinations for the soybeans were Indonesia and China, which accounted for 4.648 million and 4.203 million bushels, respectively.

 

 

SOY PRODUCTS

 

Soymeal futures rallied to 9-month highs, as well as new highs for 2009 on technical and fundamental strength. Strong global protein demand coupled with tight availability of nearby supplies served as the fundamental catalyst for the gains, analysts said.

 

Technical strength attracted speculative buying as well, with the ability of the July futures to eclipse previous highs uncovering pre-placed buy orders, a CBOT floor broker said.

 

Soyoil futures stumbled Tuesday, succumbing to selling pressure from adjustments in the meal/oil spread relationship, weakness in world vegoils and ample U.S. inventories, traders said.

 

July oil share ended at 32.71%. The July soybean crush ended at 81 3/4 cents.