December 4, 2009

 

CBOT Soy Review on Thursday: Bounce on strong demand, technical buying

 

 

Soy futures at the Chicago Board of Trade ended higher Thursday, bouncing back from Wednesday's tumble on strong demand and technically inspired buying.

 

CBOT January soy ended 13 cents higher at US$10.47, and March soy settled 13 1/2 cents higher at US$10.54 1/2.

 

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

 

Good prospects for exports continued to provide fundamental support for prices, said Bill Nelson, analyst with Doane Advisory Service in St. Louis.

 

Weekly soy shipments were over 1 million metric tonnes once again, and with the allure of Chinese buying interest continuing until South American supplies on line, futures remained firmly underpinned, Nelson said.

 

Otherwise, the market had few directives, as mixed signals from outside markets left traders focusing on technical signals and bullish fundamentals to hold sellers at bay following Wednesday's sell-off.

 

Trader ideas that Wednesday's losses were overdone helped underpin prices, with bullish traders encouraged by the January contract's ability to hold above chart support at the US$10.35 level.

 

The U.S. Department of Agriculture reported 1,363,700 metric tonnes were shipped in the week ended Nov. 26, with China the primary destination for 723,600 tonnes. USDA said soymeal shipments in the week ended Nov. 26, were 358,900 metric tonnes, up 39% from the previous week and 56% from the prior 4-week average.

 

 

Soy Products

 

Soy product futures ended higher, with soymeal climbing on strong underlying demand. Continuing signs of strength related to exports served as the catalyst for the gains, said Nelson. The export sales were not that impressive, but shipments on a weekly basis were the highest since April 1998, he said.

 

Soyoil futures were steady to firm, bouncing back from early losses. Rising consumption of soyoil for biodiesel provided fundamental support, but mixed activity in crude oil futures kept a lid on advances while pinning futures in negative territory for most of the day.

 

December soymeal ended US$4.20 higher at US$321.50 per short tonne, while March soymeal settled at US$7.00 higher at US$312.50. December soyoil finished unchanged at 39.75 cents per pound, while March soyoil ended 1 point higher at 40.12.

 

January oil share was 39.18 while the January soy crush ended at 81 3/4 cents.