May 30, 2009

 

CBOT Soy Review on Friday: Higher; new crop leads; consolidation

 

 

Chicago Board of Trade soybean futures ended higher Friday, with new crop contracts the upside leader on the unwinding of bull spreads.

 

CBOT July soybeans settled 5 cents higher at US$11.84 and November soybeans finished 9 1/2 cents higher at US$10.62 1/2.

 

July soymeal settled US$1.30 lower at US$382.50 per short tonne. July soyoil finished 124 points higher at 39.05 cents per pound. In pit trades, speculative fund buying was estimated at 4,000 lots in soybeans, and 1,000 lots in soymeal.

 

Consolidation was the theme of the day for old crop contracts. "It was evident that the July contract was in a consolidative phase after achieving a milestonnee upside objective of US$12.00 a bushel earlier in the week," said John Kleist, broker/analyst at Allendale Inc.

 

The consolidation of the July/November bull spread was featured as well, with the November contract benefiting from the unwinding of the spread, Kleist said.

 

The July/November bull spread settled at US$1.21 1/2 a bushel, down from Thursday's settlement of US$1.26.

 

Lower-than-expected weekly export sales, with purchases from China dropping off significantly took some edge off nearby contracts. Meanwhile, lingering planting issues for the eastern Midwest provided enough uncertainty to entice traders into adding some risk premium to the back end of the market, analysts said.

 

Nevertheless, the nearby July future still managed to end firmer, as tight old crop supplies and weakness in the U.S. dollar provided underlying support to attract speculative buying on price breaks, analysts said.

 

Looking ahead, consolidation may remain an attraction, with the rolling of spreads featured unless old crop export demand surfaces to give nearby futures some fresh fundamental strength, analysts added.

 

The DTN Ag Weather forecast calls for mostly dry conditions, with very scattered light showers, over the Midwest during the weekend period. This trend will be favorable for additional field work progress in the eastern Midwest, and will allow for generally beneficial conditions for early crop growth in areas where planting is accompanied by favorable soil moisture supplies.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal under pressure from the consolidation of meal/oil spreads. Meal had made a good run to nine-month highs previously, and was a little overbought, analysts said. Soyoil futures spiked Friday, benefitting from the unwinding of the meal/oil spread and spillover support from firmer crude oil futures and world vegoil prices overnight, analysts said.

 

July oil share ended at 33.8%. The July soybean crush ended at 87 cents.