November 25, 2009

 

CBOT Soy Review on Tuesday: End up; demand overshadows outside weakness

 

 

Soy futures on the Chicago Board of Trade ended higher Tuesday, managing to divorce itself from the bearish tonnee in other commodities on strong underlying demand.

 

CBOT January soy ended 4 cents higher at US$10.46, and March soy settled 4 1/4 cents higher at US$10.52.

 

In pit trades, speculative funds were estimated buyers of 3,000 lots in soy, sellers of 1,000 lots in soymeal and buyers of 1,000 lots in soyoil.

 

The market's bullish demand platform remains the underlying supportive theme for prices, said Joe Victor, analyst with Allendale Inc.

 

The absence of competition in export markets and solid domestic demand from a rebounding crushing pace continues to provide a fundamental base to keep a floor beneath prices, he added.

 

Futures experienced choppy trading action during the course of the day, garnering pressure from weakness in neighboring grain, crude oil and metal futures. However, soy are a demand driven market, leaving few opportunities for aggressive selling.

 

Overall activity was subdued in pre-holiday trade, with futures upside movement capped by technical pressure from chart resistance in the January contract near the US$10.50 per bushel level.

 

Looking ahead, traders anticipate choppy activity will continue through the remainder of the holiday shortened week, with strong demand limiting losses and overhead technical resistance keeping a lid on advances.

 

CBOT markets will be closed Thursday in observance of the Thanksgiving Day holiday. The market will reopen with Thursday night's overnight session and trade an abbreviated day session Friday. The market will close at 1 p.m., EST, Friday.

 

On tap for Wednesday, the U.S. Census Bureau is expected to estimate the October soy crush at 163.7 million bushels, up from the prior month, as the availability of new crop soy supplies allowed crushing volume to advance, according to a survey of industry analysts. The Census Bureau's crush report is scheduled for release Wednesday at 8 a.m. EST (1300 GMT).

Soy Products

 

Soy product futures ended mostly higher, with soyoil gaining product share value on adjustments in the meal/oil spread relationship. Strong demand is the undercurrent buoying the soycomplex, enabling soyoil to shake off the spillover pressure from stumbling crude oil futures, traders said.

 

Soymeal futures ended mostly higher, supported by solid domestic and export demand, with end users looking to replenish depleted stocks as well.

 

December soymeal ended US$0.20 lower at US$315.40 per short tonne, while March soymeal settled at US$0.50 higher at US$309.60. December soyoil finished 30 points higher at 39.70 cents per pound, while March soyoil ended 29 points higher at 40.11.

 

January oil share was 39.33 while the January soy crush ended at 76 1/4 cents.