October 8, 2008

 

CBOT Soy Review on Tuesday: Climbs on technical buying, outside support

 

 

Chicago Board of Trade soybean futures ended higher Tuesday, managing to bounce back from Monday's limit-down plunge on technical buying and outside market support.

 

November soybeans ended 4 cents higher at US$9.26.

 

December soymeal settled US$6.90 higher at US$256.80 per short tonne. December soyoil finished 18 points lower at 39.82 cents per pound.

 

After tumbling to one-year lows Monday, futures were oversold, and with crude oil rising and the U.S. dollar weaker, futures staged a minor consolidative bounce, a CBOT floor analyst said.

 

Light fundamental support was generated from a lagging harvest pace, reports of disappointing yields and solid underlying demand, traders said.

 

However, advances were held in check by lingering uncertainties in global financial markets, with traders unwilling to take on added risk in the face of bearish macroeconomic outlooks.

 

Underlying commercial buying helped trigger short covering, but once crude oil peeled off its highs and U.S. equity markets stumbled, futures quickly shed buyers and trimmed advances heading down the stretch, analysts said.

 

Looking ahead, analysts expect traders to continue to focus on outside economic influences, while Friday's U.S. Department of Agriculture crop report looms in the background.

 

The DTN Meteorlogix forecast said rain has moved from the Plains and the western Midwest into the central Midwest, stretching from Minnesota all the way to Texas and the Delta. The western Midwest has gotten about an inch and a half of rain, and the eastern Midwest is expected to rack up about an inch. For those crops still maturing, the rain is beneficial, but most crops in the central U.S. are ready to harvest, and this rain system is slowing things down.

 

In pit trades, speculative fund buying was estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal regaining product share on spreads. Soymeal futures were strongest link in the complex, bouncing on a consolidative bounce from Monday's losses and the realignment of the meal/oil spread, analysts said. Soyoil futures stumbled, unable to sustain early advances on the adjustment of spreads.

 

December oil share ended at 43.67% and the November/December crush ended at 77 cents.

 

Speculative fund buying was estimated at 1,000 lots in soymeal, while fund selling was estimated at 1,000 lots in soyoil.