December 30, 2009
CBOT Soy Review on Tuesday: Extends gains, stays range-bound
Chicago Board of Trade soy futures extended gains Tuesday as the market continued to recover from recent weakness in choppy holiday trading.
January soy finished up 9 cents at US$10.38 a bushel, while March soy closed 9 cents higher at US$10.47.
The advances followed a strong rally Monday and put CBOT March wheat up 39 cents for the week so far. Heading into the Christmas holiday on Thursday, the contract was down 58 cents on the month.
Despite the bounce, March soy remain caught in a range of US$10 to US$10.90, said Joe Victor, vice president of marketing for Allendale. Strong export demand remains supportive, as the U.S. has been the world's soy supplier following production problems in South America, he said.
"Beans are a demand-driven market," Victor said. "We continue to be a big seller to China. Domestically, we're using it."
Commodity funds bought an estimated 4,000 contracts. Volume was thin, with the grain and soy markets considered to be in "holiday mode," traders said.
Market participants are taking a step back ahead of the end of the year. The CBOT will trade an abbreviated day Thursday and be closed Friday.
There appeared to be some buying in anticipation of fund-buying early in the new year, an analyst said. Traders expect funds to rebalance their allocations and put more money into grains and soy, he said.
Many traders also are keeping an eye on Jan. 12, when the USDA is slated to issue highly anticipated estimates on U.S. production. There is lingering uncertainty over the size of the soy crop because of a late harvest.
Soy Products
CBOT soy product futures finished mixed. Soymeal extended Monday's gains with soy as commodity funds bought an estimated 1,000 contracts, a trader said.
Soyoil pulled back after the strong finish Monday. Funds weren't seen as buyers or sellers in the market.
March soymeal closed US$2.70 higher at US$307.60 a short tonne. March soyoil stumbled 20 points to 39.85 cents a pound.
