December 16, 2009

 

CBOT Soy Review on Tuesday: End well off highs on late profit-taking

 

 

Soy futures at the Chicago Board of Trade ended steady to higher Tuesday, finishing well off earlier highs as end-of-the-day position squaring surfaced to trim advances.

 

CBOT January soy ended unchanged at $10.55 and March soy settled 1/4 cent higher at $10.62.

 

Speculative funds were estimated buyers of 1,000 lots in soy.

 

Strong underlying demand fundamentals remain the underpinning feature in the market, as fresh export sales to China raise the potential for a tighter 2009-10 soy balance sheet, analysts said.

 

Outlooks for speculative funds to increase their investment in agricultural commodities starting the New Year kept sellers in a cautious mood, limiting downside risks.

 

The path of least resistance remains higher in soy, and as long as aggressive sellers fail to show up, futures will continue to find upside potential, a CBOT floor analyst said.

 

However, as the session drew to an end, profit-taking emerged to temper the bullish tonnee, with favorable crop conditions in South America applying mild pressure to cap advances after futures set two-week highs.

 

Traders remain concerned about the potential for export demand to shift to Brazil and Argentina barring a weather problem in South America.

 

The DTN Meteorlogix weather forecast said Brazil's weather pattern is favorable for soy from Parana northward as periodic showers continue and there is no significant hot weather in sight. However, it may still be too wet in Rio Grande do Sul in the far south, slowing the planting effort for soy.

 

In Argentina, increasing shower activity later this week will favor developing crops while causing only minor planting delays, Meteorlogix said.

 

Meanwhile, Brazil's upcoming 2009-10 soy crop is in the final stage of being planted, Brazil's local agricultural consultancy Celeres said in a report. Brazil's soy farmers had planted 91% of the 2009-10 crop as of Dec. 11 compared with a figure of 92% a year ago and 85% in the prior week, Celeres said.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 290,000 metric tonnes of soy for delivery to China during the 2009-10 marketing year, the USDA said Tuesday.

 

 

Soy Products

 

Soy product futures ended narrowly mixed, finishing near unchanged levels. The products followed the lead of soy, backpedaling down the stretch on profit-taking. Solid underlying demand remains a bullish feature for the market, but as traders settle into their end-of-the-year holiday mode, the market had trouble sustaining advances heading into the close, analysts said.

 

January soymeal ended $0.60 higher at $316.80 per short tonne, while March soymeal settled $0.20 lower at $312.40. January soyoil finished 1 point higher at 39.64 cents per pound, while March soyoil ended 1 point higher at 40.05.

 

January oil share was 38.52 while the January soy crush ended at 78 cents.