October 14, 2008

 

CBOT Soy Review on Monday: Rally sustained on outside market strength

 

 

Chicago Board of Trade soybean futures closed higher Monday, as strength in the outside markets supported a lightly traded rally, traders said.

 

November soybeans settled 18 cents higher at US$9.28, off the day's high of US$9.38.

 

The Dow Jones Industrial Average had gained more than 600 points when grain trading closed for the day. Crude oil moved higher, while the dollar stayed weaker.

 

The soy products also benefited from outside market strength. December soymeal settled 70 cents higher at US$256.70 per short tonne. December soyoil finished 192 points higher at 39.21 cents per pound. Soybeans are "staying steady because of the strength of the outside markets," said Jay Fitzgerald, an Advance Trading broker.

 

Soybeans contracts were "oversold and due for a bounce," he added.

 

And while the market may retest its recent lows, Fitzgerald said the USDA's recent increased yield estimates are too high, which should lend some mid-term support.

 

Monday's trade marked "a fairly muted recovery after the break we've had," a CBOT floor trader said.

 

Farmers aren't contributing much activity at this point, Fitzgerald said.

 

"They aren't selling anything and they are not buying any inputs," he said.

 

Traders said they expected about 40% of the nation's soybean crop to be harvested when the U.S. Department of Agriculture releases its weekly crop progress report at 4 p.m. EDT Tuesday. The report, usually released Monday, is delayed due to the federal Columbus Day holiday.

 

Speculative fund buying was estimated at 3,000 CBOT soybean contracts.

 

 

SOY PRODUCTS

 

Soy-product futures posted gains Friday, following the soybean rally, as traders found inspiration in gains seen in equities and crude oil.

 

December oil share ended at 43.3% and the November/December crush ended at 68 cents.

 

Speculative fund buying was estimated at 2,000 lots in soyoil and seen as even in soymeal.