August 8, 2009

 

CBOT Soy Review on Friday: Climb on bullish outlooks on fundamentals

 

 

Soy futures at the Chicago Board of Trade climbed Friday, bolstered by bullish outlooks on fundamentals.

 

CBOT August soys ended 14 cents higher at US$11.84 1/2, and November soys finished 8 1/2 cents higher at US$10.38 1/2. In pit trades, speculative fund-buying was estimated at 3,000 lots in soys.

 

December soymeal ended US$4.50 higher at US$319.00. December soyoil finished 5 points lower at 37.49 cents per pound.

 

Tightening old-crop inventories in the face of strong domestic and export demand served as the rallying cry for bullish traders, analysts said. Old-crop contracts led the upward assault, with reports of processors scrambling for supplies keeping sellers on the run.

 

The bullish theme was consistent, but prices did experience a midday slide on profit-taking, before selling was consumed by speculative and end-user buying down the stretch, traders said.

 

New-crop futures rose as well, buoyed by the uncertainty of production, as crops head through there critical pod-filling stage of development.

 

With a record demand forecast for the first six months of the 2009-10 marketing year, and with tight carryover supplies on tap, traders are unwilling take risk premium out of the market, said Steve Freed, an analyst at ADM Investor Services in Chicago.

 

The developing crop needs good weather through its critical August growing period as there is no room for error in production, and that is expected to keep many sellers on the sidelines near term, analysts said.

 

The DTN Meteorlogix Weather forecast said the next several days or week will see a typical summer pattern of hit-or-miss showers and thunderstorms.

 

Looking ahead, the U.S. Department of Agriculture will release its weekly export inspection and crop progress reports Monday, and its August crop production and supply and demand reports Wednesday.

 

 

Soy Products

 

Soy product futures ended mixed, with soymeal gaining product share on spreads. Soymeal rallied in unison with soys, bolstered by strong demand and tight supplies. Soyoil futures drifted lower, failing to sustain early price strength on declines in crude oil, and meal/oil spreading amid ample soyoil stocks.

 

The December oil share was 37.08%, while the November/December soy crush ended at 75 3/4 cents.