December 11, 2008
CBOT Soy Review on Wednesday: Futures bounce; outside markets underpin
The bullish influence of outside markets and the absence of selling pressure set the stage for Chicago Board of Trade soybean futures to bounce Wednesday.
CBOT January soybeans finished 16 1/2 cents higher at US$8.29 1/2.
January soy meal settled US$3.20 higher at US$248.00 per short tonne. January soyoil finished 104 points higher at 30.85 cents per pound.
The rise in crude oil futures, a weaker U.S. dollar and higher stock index futures for most of the day gave speculative buyers encouragement to extend the market's recovery from prior lows, analysts said.
Position evening and short covering ahead of Thursday's supply and demand reports aided the supportive tonnee. A quiet news front and the unwillingness of traders to take on added risk in the face of global economic uncertainty limited upside potential and kept activity subdued.
Otherwise, the trade continues to focus its attention on outside markets for leadership, as economic woes continue to shake the confidence of the investment community, analysts said.
The DTN Meteorlogix weather forecast said during the next few days a drier and hotter trend will develop from Argentina north into southern Brazil. This hotter trend has the potential to quickly take up moisture that has fallen and stress developing vegetative soybeans.
On tap for Thursday, the U.S. Department of Agriculture at 8:30 a.m. EST is scheduled to release its monthly supply and demand report for December. The average of analysts estimates in a Dow Jones Newswires survey pegs 2008-09 U.S. soybean ending stocks at 200 million bushels, down 5 million from November's forecast. The estimates ranged between 161 million and 215 million bushels.
USDA will also issue its weekly export-sales report at 8:30 a.m. EST Thursday. Soybean sales are estimated at 500,000 to 800,000 tonnes. Soymeal sales are projected in a range of 70,000 to 125,000 metric tonnes, with soyoil sales expected in a zero-to-10,000-tonne range.
In pit trades, speculative fund buying was estimated at 3,000 lots.
Soy product futures climbed in unison with soybeans. Soyoil continued its recovery of product share on spreads, with spillover support from crude oil futures bolstering upside movement, analysts said.
In pit trades, speculative fund buying was estimated at 2,000 lots in soyoil.
January oil share ended at 37.92% and the January crush ended at 55 1/2 cents.