December 23, 2008
CBOT Soy Review on Monday: Ends up; extends two-week recovery from lows
Chicago Board of Trade soybean futures ended higher Monday, extending their two-week recovery from contract lows on underlying export demand, weakness in the U.S. dollar and technical buying.
CBOT March soybeans finished 18 cents higher at US$8.90 1/2.
March soy meal settled US$7.50 higher at US$274.90 per short tonne. March soyoil finished 34 points higher at 31.25 cents per pound.
The absence of direct outside influences allowed futures to garner support from their own fundamentals, with a strong export base and a lower U.S. dollar sparking the higher tonnee, analysts said.
However, futures did sell off from their highs, pulling back on weakness in crude oil futures and position squaring after the market failed to challenge major overhead resistance levels, said Brian Hoops, analysts with Midwest Market Solutions in Yanktonne, S.D.
Futures initially followed the overnight theme, energized by talk that Argentina wasn't going to lower its export tax on soybeans, lingering dryness concerns in South America and technical buying inspired by the most-active March soybean future's ability to climb above its 50-day moving average for the first time since July, Hoops added.
Strong resistance near the US$9.00-per-bushel level basis the March contract served as a roadblock for upside momentum. Traders anticipate the market will maintain a cautious tonnee near term, as the trade looks to avoid added risk heading into the holidays.
"Rains this week will likely not be sufficient to eliminate the longer-term moisture deficits in southern Brazil, but the 0.50 to 1.5" rain totals that are generally expected should calm any concerns for the balance of the month in much of the region," Cropcast Weather Services said in a forecast.
As for Argentina, there remains a significant area (at least 1/4 of both corn and soybeans) that will likely finish out December with ongoing moisture stress, Cropcast reported. This includes much of Entre Rios, central Santa Fe, northeastern Cordoba, eastern Buenos Aires and western La Pampa, Cropcast said.
On tap for Tuesday, the U.S. Census Bureau's soybean crush report is scheduled for release Tuesday at 8 a.m. EST (1300 GMT). U.S. soybean crush for November is expected to be 146.4 million bushels in the U.S. Census Bureau's monthly report, down from the October figure of 149.7 million bushels.
November soymeal stocks are seen declining to 343,000 short tonnes, down from the 370,291 tonnes reported for October. Soyoil stocks are seen increasing to 2.465 billion pounds in the report, up from 2.404 billion in the previous month.
Soy product futures bounced in step with soybeans, fueled by technical buying. Soymeal gain product share versus soyoil on spreads, with weakness in crude oil limiting advances in soyoil.
March oil share ended at 36.24% and the March crush ended at 58 cents.