December 19, 2008
CBOT Soy Review on Thursday: Beans climb; technical buys, exports, weather
Chicago Board of Trade soybean futures ended higher Thursday, climbing on technical strength, solid export demand and South American weather concerns.
CBOT January soybeans finished 5 1/2 cents higher at US$8.69 1/2.
January soy meal settled US$3.10 higher at US$266.30 per short tonne. January soyoil finished 30 points lower at 30.70 cents per pound.
Good underlying export demand coupled with growing concern that southern Brazil dryness issues are rising served as an underpinning feature for prices, said Mike Zuzolo, analyst with Risk Management Commodities Inc.
Technical buying aided the gains as well, with buyers encouraged by the market's ability to hold above key support near the US$8.50 level basis the January future on technical charts, Zuzolo added.
However, the markets experienced two-sided trade once again, with weakness from corn futures, contract lows in crude oil and a spike in the U.S. dollar index applying pressure to damp bullish momentum.
Overall activity remained subdued, with prices hovering within a recent trading range. Traders continued to take a cautious approach amid global economic uncertainty and an unwillingness to take on added risk heading into year-end holidays.
Looking ahead, traders anticipate choppy activity will continue heading toward the holidays, with outside market factors watched closely in an uncertain economic climate, a CBOT floor analyst said.
The DTN Meteorlogix weather forecast said central crop areas of Argentina are trending drier. In the next five days, there is still a chance for scattered showers and cooler temperatures, with rainfall needed to ease stress to crops caused by mostly above normal temperatures.
Rio Grande do Sul province in southern Brazil should be hotter and mostly dry until a cold front arrives next Monday or Tuesday. Indications suggest that showers associated with the front early next week will be only light, Meteorlogix added.
The U.S. Department of Agriculture reported total weekly soybean export sales were a net 900,300 metric tonnes for the week ended Dec. 11. Sales for 2008/09 were a net 893,600 metric tonnes. Analysts had forecast sales between 575,000 and 750,000 metric tonnes.
USDA also announced Thursday private export sales of 116,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.
Soy product futures ended mixed, with soyoil stumbling on the bearish influence of new contract lows scored in crude oil futures. Soymeal futures climbed in step with soybeans, benefiting from meal/oil spreads as well.
January's oil share ended at 36.57% and the January crush ended at 54 cents.