November 20, 2009

 

CBOT Soy Review on Thursday: Soy, meal continue rise on strong demand

 

 

A bullish demand scenario provided enough fundamental support to extend Chicago Board of Trade soy futures' uptrend in the face of weak outside market influences Thursday.

 

CBOT Jan soy ended 12 cents higher at US$10.39, and March soy settled 11 1/2 cents higher at US$10.44 3/4.

 

In pit trades, speculative funds were estimated buyers of 4,000 lots in soy, 1,000 lots in soymeal, while estimated net sellers of 1,000 lots in soyoil.

 

The market has been very resilient in its upside push, with export sales lighting a match under the market, said Greg Wagner, analyst with AgResource Co. in Chicago.

 

A constructive demand scenario, with China's appetite for U.S. soy not diminishing and crush demand another illuminating factor keeping buyers enthused, Wagner added.

 

The strong exports and crush are encouraging some more optimistic views on 2009-10 marketing year demand. The U.S. has an open window for export demand, with competition from South American suppliers not expected until early 2010 when Brazil and Argentina crops begin to move into the world pipeline.

 

The allocation of investment money into commodities remains a supportive feature, with soy's bullish demand outlooks attracting speculative buyers in the face of overall weakness in the U.S. dollar.

 

Otherwise, futures had little other fresh news to digest, but looking ahead demand remains the drawing card for the soy market as speculative money continues to flow into the market, Wagner added.

 

The U.S. Department of Agriculture reported total weekly soy export sales were a net 1,349,700 metric tonnes for the week ended Nov. 12. The primary buyer was China with 724,700 tonnes. USDA reported a marketing year high 1,724,200 metric tonnes were shipped in the week ended Nov. 12, with China the primary destination for 914,500 tonnes.

 

USDA also announced private exporters reported the sale of 116,000 metric tonnes of soy for delivery to China during the 2009/2010 marketing year, the USDA said Thursday.

 

 

Soy Products

 

Soy product futures ended mixed, with soymeal gaining product share value on the realignment of meal/oil spreads. Soymeal futures extended its recent upward trend on technical charts, climbing to three-month highs on bullish demand side fundamentals. Higher-than-expected weekly export sales, the replenishing of dwindled domestic pipeline supplies and minor psychological fears of corn vomitoxin increasing meal demand underpinned prices, said Ag Resource analyst Greg Wagner.

 

Soyoil futures ended lower, under pressure from weakness in crude oil futures and meal/oil spreading. However, despite the losses, traders were encouraged by the market's ability to limit losses on supportive demand outlooks.

 

December soymeal ended US$7.90 higher at US$318.40 per short tonne, and December soyoil finished 30 points lower at 39.45 cents per pound.

 

December oil share was 38.41 while the January/December soy crush ended at 84 1/4 cents.