November 27, 2008

 

CBOT Soy Review on Wednesday: Gains on position-squaring, outside gains

 

 

Chicago Board of Trade soybean futures maintained a muted pre-Thanksgiving rally Wednesday, supported by stronger crude oil and equities.

 

"It was a non-event; nobody wanted to play," a CBOT floor broker said of the day's lackluster finish.

 

Position-squaring ahead of the holiday added support throughout the day, traders said.

 

January soybean contracts finished up 3 cents a bushel to close at US$8.86, above the 10-day moving average. The contract traded a 17-cent range on low volume. The high was US$8.99. March soybeans added 2 1/2 cents to close at US$8.94. It also spread a 17-cent range, topping at US$9.06 3/4.

 

Midday estimates pegged speculative fund selling at 1,000 soybean contracts.

 

The U.S. Department of Agriculture will delay releasing its weekly export sales numbers until Friday at 8:30 a.m. EST.

 

Analysts expect U.S. soybean export sales to total 500,000-800,000 metric tonnes. Week-earlier sales totaled 790,900 metric tonnes.

 

In the longer-term, the nearby contract should range US$8.50-US$9.50 through the end of the South American growing season, a trader said.

 

Argentina's soybeans benefitted from heavy thundershowers and more rain is anticipated through the weekend, said T-Storm Weather President Mike Tannura.

 

South Brazil and Mato Grosso are forecast to be dry for the next 7-10 days, while center-west and southeastern areas should receive helpful moisture, Tannura added.

 

 

Soy Products

 

CBOT soy products closed higher Wednesday, with soymeal making a late-session turnaround.

 

December soymeal bucked its day-long negative trend to post a 70 cent gain, closing at US$263.20 per short tonne. It initially dropped following a smaller-than-expected October crush report and a bigger-than-expected soymeal stocks figure released Wednesday by the U.S. Census Bureau.

 

Soymeal stocks for October totaled 370,291 short tonnes, compared to the average guess of 279,500.

 

December soyoil gained 26 points to close at 32.50 cents per pound.

 

Soyoil took direction from higher crude oil and found additional support with a bullish stocks number, a CBOT floor trader said.

 

Soyoil stocks totaled 2.384 billion pounds. Analysts, on average, expected 2.502 billion pounds.

 

Speculative fund activity was termed even in soymeal lots and 1,000 soyoil lots purchased, according to midday estimates.

 

December oil share ended at 38.31% and the January crush ended at 51 3/4 cents.

 

First notice day for CBOT soyoil and soymeal contracts is Friday, which means it is the first day on which notices of intention to deliver actual commodities against futures-market positions can be received.

 

Analysts expect deliveries against the December soymeal contract to range from zero to 38 lots. December soyoil delivery notices are pegged in a range of 1,000-4,500 lots.

 

As of 5 p.m. EDT Tuesday, 38 soymeal contracts and 12,761 soyoil contracts were registered for delivery at CBOT-approved warehouses.