December 1, 2009

 

CBOT Soy Review on Monday: Bounce on dollar weakness, demand strength

 

 

Chicago Board of Trade soy futures rallied Monday, rising to new 5 1/2 month highs on bullish demand fundamentals and supportive outside market influences.

 

CBOT January soy ended 7 1/2 cents higher at US$10.60 1/2, and March soy settled 7 1/4 cents higher at US$10.66.

 

In pit trades, speculative funds were estimated buyers of 5,000 lots in soy, and 1,000 lots in soyoil.

 

The lower U.S. dollar, higher crude oil futures and a very sturdy soy technical chart were bullish features keeping buyers enthused in otherwise subdued trading, said John Kleist, broker/analyst with Allendale Inc.

 

Futures experienced choppy action in early trade, but once outside markets provided a push, speculative buying surfaced as the market eclipsed overhead resistance levels at recent highs.

 

A bullish fundamental base remains the underpinning feature of the market, with questions about how much new investment money will flow into the market place at the start of December holding sellers at bay.

 

Tuesday is the beginning of the month and beginning of the end of the quarter and year and that may present an opportunity for speculative funds to defend their long positions, Kleist said.

 

Meanwhile, sellers remain reluctant participants, as the market braces for potential large scale fund buying similar to the buying that appeared at the start of November, said Victor Lespinasse, analyst with Grainanalyst.com.

 

U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EST, with harvest progress expected to be nearly complete.

 

 

Soy Products

 

Soy product futures ended modestly higher, climbing in step with advances in soy. Soyoil was buoyed by spillover support from crude oil futures while soymeal garnered support from solid underlying domestic and export demand.

 

December soymeal ended 30 cents higher at US$326.80 per short tonne, while March soymeal settled at 70 cents higher at US$315.20. December soyoil finished nine points higher at 40.19 cents per pound, while March soyoil ended six points higher at 40.58.

 

January oil share was 39.05 while the January soy crush ended at 79 1/4 cents.