November 26, 2009

 

CBOT Soy Review on Wednesday: Beans rise on bullish demand, outside markets

 

 

Chicago Board of Trade soy finished higher Wednesday, bouncing on bullish demand and supportive outside market influences.

 

CBOT January soy ended 8 1/2 cents higher at US$10.54 1/2, and March soy settled 8 3/4 cents higher at US$10.60 3/4.

 

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

 

Commercial demand remains an underpinning feature in the market, with solid export and processor demand buoying prices, said Brian Hoops, president of Midwest Market Solutions.

 

A strong fundamental base is providing soy futures with enough support to stand on its own feet, enabling it to escape some of the outside factors that affect neighboring grains.

 

Weakness in the U.S. dollar served as a bullish signal for commodities in general. Futures experienced another choppy, two-sided trading session, with end-of-the-month speculative profit-taking and the unwinding of some soy/wheat and soy/corn spreads briefly pinning prices in negative territory.

 

Once the selling was absorbed by the market, however, end user demand emerged to counter the price weakness, Hoops said. Technical buying added to the late session bounce, with advances accelerating once futures climbed back above chart resistance at the US$10.50 level basis January futures.

 

Nevertheless, futures remain in a sideways trading range, with traders anticipating choppy activity will resume in Friday's shortened trading session.

 

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.

 

The U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST Friday. Analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended Nov. 19 to be in the range of 800,000 to 1,100,000 metric tonnes. Soymeal export sales are seen between 150,000 and 250,000 tonnes, while soyoil sales are pegged between 5,000 and 20,000 tonnes.

 

 

Soy Products

 

Soy product futures ended mixed, with meal/oil spreading featured attractions. Soyoil futures rallied, gaining product share value on spillover strength from crude oil futures and profit taking on meal/oil spreads, said Hoops. Supportive stocks data from Census Bureau's October crush report provided some fundamental support as well.

 

Soymeal futures ended mostly lower, pressured by profit-taking on spreads and larger-than-expected stocks data in the Census crush report.

 

December soymeal ended US$2.60 higher at US$318.00 per short tonne, while March soymeal settled at US$0.30 lower at US$309.30. December soyoil finished 87 points higher at 40.57 cents per pound, while March soyoil ended 88 points higher at 40.99.

 

January oil share was 39.88, while the January soy crush ended at 84 cents.