August 1, 2009

 

CBOT Soy Review on Friday: Speculative buys push prices to new highs for week

 

 

Soy futures on the Chicago Board of Trade ended higher Friday, finishing on its highs after choppy, consolidative action gave way to late speculative buys.

 

CBOT August soys ended 5 3/4 cents higher at US$11.34, and November soys finished 11 cents higher at US$9.82. In pit trades, speculative fund buying was estimated at 3,000 lots in soys, and 1,000 lots each in soymeal and soyoil.

 

December soymeal ended US$3.70 higher at US$300.50. December soyoil finished 12 points higher at 35.80 cents per pound. End-of-month positioning and consolidation was featured for most of the day, with the unwinding of some bull spreads and rolling of August positions focal points of market activity, analysts said.

 

Supportive outside market influences, with weakness in the U.S. dollar and strong crude oil futures provided strength to keep a floor beneath prices.

 

The market managed to shake off the consolidation impacts as the session drew to a close, with tight inventories, strong demand and the uncertainty of new crop production bullish fundamental features attracting buyers, analysts said.

 

The September/November bull spread differential widened, with concerns about the availability of new crop supplies in September amid the delayed maturation of 2009 crops due to late spring seedings buoying prices.

 

The market ended on its highs for the week, with future direction seen tied to weather, demand and outside economic impacts.

 

Meanwhile, new crop futures were also buoyed by Late developing soy crops across portions of the central U.S. raising concerns about reduced yield potential and the threat of crop losses if the growing season is cut short by an early frost.

 

The lagging development pace of soys in key growing states of Illinois, Indiana, Minnesota and Ohio provides for a lot of elasticity in soy yield potential, making August weather conditions even more critical for final output.

 

 

Soy Products

 

Soy product futures ended higher, breaking out of its mixed theme on a late bounce in soy futures. Soymeal was buoyed by tight supplies and strong demand. Soyoil recovered from early meal/oil spread weakness on spillover support from a bounce in crude oil futures.

 

December oil share was 37.4%, while the November/December soy crush ended at 73 cents.