December 31, 2008


CBOT Soy Review on Tuesday: Climb; south American weather,dollar weakness



Soybean futures on the Chicago Board of Trade ended higher Tuesday, managing to carve out advances on support from dryness issues in Argentina and weakness in the U.S. dollar.


Chicago Board of Trade March soybeans finished 7 1/2 cents higher at US$9.53.


March soymeal settled US$5.80 higher at US$297.30 per short tonne. March soyoil finished 11 points lower at 32.42 cents a pound.


Futures experienced two-sided, consolidative trade throughout, but supportive fundamentals proved to be an overriding factor to boost prices after Monday's technical correction, a CBOT floor analyst said.


Supply concerns surrounding moisture deficits in Argentina and southern Brazil remained underpinning features, with solid export demand and a weaker U.S. dollar fundamentally bullish features, analysts said.


However, the unwillingness of traders to take on added risk heading into the New Year's holiday limited advances and sparked consolidative position squaring on rallies to briefly drop futures into negative territory.


Otherwise, volume was thin, but traders said a light supportive undercurrent in the market surrounds speculation that the U.S. Department of Agriculture may issue a friendly surprise in an upcoming five-year review of grain and oilseed stocks. USDA statisticians will revisit their annual stocks estimates using fresh data for the five-year agricultural census to confirm previously released information.


The report is scheduled for release Wednesday at 3 p.m. EST.


Meanwhile, deliveries against CBOT January soybean and soymeal contracts on first notice day Wednesday are expected to remain light, while analysts have mixed opinions on soyoil notices.


Analysts expect deliveries against the CBOT January soybean contract to fall in a range of zero to 400 lots, with most analysts leaning toward a range of zero to 200 lots. Soymeal deliveries are seen between zero and 100 lots, while soyoil delivery notices are expected in a range of 800 to 4,000 contracts.



Soy Products


Soy product futures ended mixed Tuesday. Soymeal futures managed to charge higher, consolidating from Monday's declines in unison with soybeans. Meal also benefited from weather issues for Brazil and Argentina, traders said. Argentina is the world leader in soymeal and soyoil exports.


Soyoil futures experienced a two-sided session, finally succumbing to meal/oil spreading and spillover weakness from crude oil futures, analysts said.


March oil share ended at 35.38% and the March crush ended at 57 3/4 cents.


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