November 28, 2009

 

CBOT Soy Review on Friday: Beans trim losses; outside markets pare declines

 

 

Soy futures on the Chicago Board of Trade ended modestly lower Friday, well off initial lows, as strong underlying demand and the tempering of outside market pressure generated support.

 

CBOT markets traded an abbreviated day session Friday. The market closed at 1 p.m. EST.

 

Once outside markets scaled back their losses and the worst fears about the Dubai debt crisis had subsided, futures found buyers to lift futures from their lows, said Don Roose of U.S. Commodities.

 

A strong underlying fundamental base, with marketing-year high weekly export shipments and solid weekly sales served as catalysts to limit selling pressure, analysts said. However, a stronger U.S. dollar remained a bearish feature to keep pressure on prices. A stronger dollar makes U.S. supplies more costly to world importers.

 

Futures initially followed the weak overnight theme, stumbling on global economic fears, with investors exiting riskier asset classes. Broad commodity weakness sent negative waves through the marketplace, but once the early risk aversion trade was mitigated, fundamental support surfaced, Roose added.

 

Otherwise, activity was subdued in thin holiday volume, with many traders on the sidelines after the Thanksgiving Day holiday.

 

CBOT January soy ended 1 1/2 cents lower at US$10.53, and March soy settled 2 cents lower at US$10.58 3/4.

 

In pit trades, speculative funds were estimated sellers of 2,000 lots in soy, and 2,000 lots in soyoil. The U.S. Department of Agriculture reported total weekly soy export sales were a net 1,135,300 metric tonnes for the week ended Nov. 19. The primary buyer was China with 859,800 tonnes. Analysts had forecast sales between 800,000 and 1,100,000 metric tonnes.

 

USDA reported a marketing-year high 2,434,500 metric tonnes were shipped in the week ended Nov. 19, with China the primary destination for 1,835,500 tonnes.

 

First-notice day for December soymeal and soyoil contracts is Monday, which means it is the first day on which notices of intention to deliver actual commodities against futures-market positions can be received.

 

Analysts expect deliveries against the December soymeal contract to range from none to 50 lots. December soyoil delivery notices are pegged in a range of 2,000-3,000 lots.

 

 

Soy Products

 

Soy product futures ended mixed, with soymeal gaining product value share on spreads. Solid underlying demand and worries of soy quality issues making processors' ability to make high protein soymeal difficult, supported prices, analysts said. The market was able to widen its inverse spread relationships, with nearby supplies in tight hands expected to limit deliveries against the December contract.

 

Soyoil futures ended lower, succumbing to spillover pressure from crude oil and meal/oil spreading.

 

December soymeal ended US$8.50 higher at US$326.50 per short tonne, while March soymeal settled at US$5.20 higher at US$314.50. December soyoil finished 47 points lower at 40.10 cents per pound, while March soyoil ended 47 points lower at 40.52.

 

January oil share was 39.21 while the January soy crush ended at 80 1/4 cents.