October 21, 2008


CBOT Soy Review on Monday: Extends bounce, consolidates; stable outsides



Soybean futures at the Chicago Board of Trade climbed Monday, extending Friday's bounce, as stability in outside financial markets uncovered consolidative buying.


CBOT November soybeans ended 35 cents higher at US$9.29 a bushel.


December soymeal settled US$8.30 higher at US$266.50 per short tonne. December soyoil finished 211 points higher at 37.61 cents per pound.


The absence of weakness in outside markets took some fears away from buyers, raising thoughts that a near-term bottom had been formed in the market, analysts said.


The Dow Jones Industrial Average was more than 200 points higher when soybeans closed, and crude oil futures were more than US$2.00 a barrel higher.


Signs of stabilizing markets allowed futures to consolidate, with higher-than-expected weekly export inspections and strong gains in overseas Asian markets adding to the supportive tonnee, analysts added.


Otherwise, activity was quiet, with futures sustaining price strength amid supportive demand outlooks and uncertainty surrounding yield totals providing fundamental strength. Traders continue to take a cautious view on market activity amid the recent volatile makeup of financial markets.


The DTN Meteorlogix forecast for the central U.S. for the middle to latter portion of the week calls for moderate to heavy rain to develop in the region, especially in the western Midwest. Rainfall of up to two inches is in store for the western Midwest. This rain will stymie harvest activity. Eastern Midwest areas will take in up to an inch of rain, which will bring some harvest delays as well.


In addition to wet weather, temperatures will turn notably colder in the central U.S. during the coming week. Daytime highs will run from 10-12 degrees Fahrenheit below average, Meteorlogix added.


The U.S. Department of Agriculture reported soybeans inspected for export in the weekend Oct. 16 totaled 27.854 million bushels. Analysts surveyed by Dow Jones Newswires anticipated inspections in a range of 15 million to 30 million bushels.


USDA will release its weekly crop progress report at 4 p.m. EDT. Analysts surveyed by Dow Jones Newswires anticipate soybean harvest progress between 65% and 75% complete.


In pit trades, speculative fund buying was estimated at 4,000 lots.





Soy product futures rallied in step with advances in soybeans. The supportive impact of higher outside markets, with crude oil rallying and the stock market able to sustain strength throughout, provided confidence to pull buyers off the sidelines, analysts said. Soyoil managed to recover some product share, as the market corrected the meal/oil relationship with spillover from crude oil aiding the advances as well.


December oil share ended at 41.37% and the November/December crush ended at 71 cents.


In pit trades, speculative fund buying was estimated at 2,000 lots in soymeal and 3,000 lots soyoil.


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