November 13, 2009

 

CBOT Soy Review on Thursday: Beans set one-week highs; demand, seasonals

 

 

Soy futures on the Chicago Board of Trade rallied to one one-week highs Thursday, managing to break away from the influence of outside markets on bullish demand outlooks.

 

CBOT November soy finished 18 1/2 cents higher at US$9.82 1/4 per bushel, and January soy ended 18 cents higher at US$9.90.

 

In pit trades, speculative funds were estimated buyers of 4,000 lots in soy, and 2,000 lots in soymeal.

 

Fundamentals took center stage, as strong export demand and the prospect of increased soymeal demand due to quality concerns surrounding distillers dried grain provided a spark to attract speculative buying, analysts said.

 

The unwinding of corn/soy spreads were featured, as continued buying from China, the seasonal trend of soy rallying after harvest progress climbs above 70% and harvest pressure in corn, opened the door for profit taking on the spread, said Joe Victor, analyst with Allendale Inc.

 

Lingering concerns about field losses in the Delta, and the uncertainty associated with South American plantings and early development encouraged traders to add a little risk premium to prices, Victor added.

 

Otherwise, technically inspired buying aided the gains, with advances accelerating once futures eclipsed near-term overhead chart resistance levels. Talk of distillers dried grain feed with vomitoxin fungus was a psychological boost to both soy and soymeal.

 

The U.S. Department of Agriculture's weekly export sales report, normally released Thursday, will be delayed until Friday due to the Veterans Day holiday.

 

 

Soy Products

 

Soy product futures ended mixed, with meal/oil spreading a featured attraction. Soymeal futures rose to one-week highs, climbing on speculative fund buying and adjustments in the meal/oil spread relationship. Soymeal was buoyed by optimistic demand outlooks amid the potential for increased soymeal demand, as a result of trade fears of potential threat of vomitoxin in DDG, analysts said. The trade is hopeful that vomitoxin-infected DDG feed would be replaced with increased soymeal use.

 

Soyoil futures ended steady to lower, losing product share value on corrections in the meal/oil spread and spillover weakness from crude oil futures, traders said.

 

December soymeal ended US$11.90 higher at US$301.00 per short tonne, and December soyoil finished unchanged at 38.37 cents per pound.

 

December oil share was 38.89%, while the November/December soy crush ended at 82 3/4 cents.