June 12, 2009

 

CBOT Soy Review on Thursday: Beans, meal hit fresh highs, trim gains

 

 

Supply worries shoved Chicago Board of Trade soy and soymeal futures to fresh multi-month highs Thursday before the markets trimmed gains.

 

July soys closed up 21 cents at US$12.67 a bushel after hitting an open outcry session high of US$12.91, its highest price since September. July soymeal ended up US$14.60 at US$428 per short tonne, while July soyoil lost 41 points to 38.20 cents per pound.

 

Soys felt spillover support from the rally in nearby July soymeal, which briefly rose the daily, exchange-imposed limit of US$20. Concerns about tight old-crop supplies continue to be fundamentally bullish for soys and soymeal, traders said.

 

Commodity funds bought an estimated 4,000 soy contracts. Bull spreading remained a feature, with November soys ending up 10 1/2 cents at US$10.89 3/4.

 

Soys and soymeal felt a boost from worries about meeting protein specifications at delivery, floor traders said. There are "growing concerns" about protein requirements as the delivery period approaches for July contracts, said Greg Wagner, senior commodity analyst for AgResource Company.

 

"At this point in time, it is not only a question of having the soys themselves but it is also a question of having the soys with the protein level in order to crush and meet the high protein specs," he said. "That is one of the root issues."

 

Weekly U.S. soy export sales were unimpressive, with net sales reductions of 61,000 tonnes for 2008-09. There were decreases of 73,500 tonnes for unknown destinations and of 55,000 tonnes for China, according to the U.S. Department of Agriculture.

 

Still, the market needs to ration demand more, an analyst said. The cancellations in weekly export sales were "not meaningful enough," he said.

 

 

Soy Products

 

CBOT soy products futures closed mixed, with soymeal surging on fears about tight supplies, traders said. July soymeal temporarily climbed the daily US$20-per-short-tonne limit to US$433.40 per short tonne, its highest price since July.

 

Weekly soymeal export sales for 2008-09 were 70,200 tonnes, down 51% from the previous week and 65% from the prior four-week average, according to the USDA. "Probably the biggest story is in the meal market, where we continue to export meal," an analyst said.

 

Traders were buying soymeal and selling soyoil in spread trades. July soyoil hit an open outcry session low of 38.06 before recovering a bit.

 

Commodity funds bought an estimated 1,000 soymeal contracts and sold an estimated 1,000 soyoil contracts.