December 17, 2009

 

CBOT Soy Review on Wednesday: Closes higher after late bounce

 

 

Chicago Board of Trade soy futures finished higher Wednesday after a choppy trading session and closed just shy of a technical objective, analysts said.

 

The market traded sides during the day and shook off modest losses before the close. Traders seemed "a little bit non-committal all the way around," with the Christmas holiday and the end of the year approaching, said Jason Britt, president of Central State Commodities.

 

January soy ended up 4 1/2 cents at US$10.59 1/2 per bushel, while March soy finished 5 cents higher at US$10.67.

 

The technical trend looks as though it is still going higher, an analyst said. Traders were eyeing the US$10.60 level for January soy, with ideas that a close above that price would confirm the trend and indicate the market has more upside potential, Britt said.

 

Commodity funds bought an estimated 4,000 contracts, a trader said. Market participants are waiting to see whether index funds return to the grain and soy markets in the coming weeks to rebalance positions, analysts said. The rebalancing could mean additional buying, they said.

 

Outside markets looked supportive for agricultural commodities, as the U.S. dollar was down and crude oil and gold were higher, an analyst said. However, it seems as though there has been a "decoupling" of the macro markets and commodities recently, he said.

 

In other news, the U.S. Department of Agriculture, in its daily reporting system, said China bought 116,000 tonnes of U.S. soy. China has been an aggressive buyer and "just continues on the demand train," Britt said.

 

 

Soy products

 

Soy product futures finished higher, as soymeal rose with soy following earlier losses. Commodity funds at the end of the session were seen as even in soymeal but had been estimated sellers of 1,000 contracts around midday, a trader said.

 

January soymeal finished up 10 cents at US$316.90 per short tonne. Jan soyoil ended up 69 cents at 40.33 cents per pound.

 

Soyoil finished stronger after feeling spillover support from gains in crude oil, traders said. Commodity funds bought an estimated 2,000 soyoil contracts.