Mumbai, May 2, (Commoditiescontrol): Soy oil futures rebounded on Wednesday, driven by technical trading and the unwinding of Soymeal/oil spread activity following the end of an Argentine oil worker strike. CBOT July soy oil settled at 43.26 cents per pound, gaining 0.25 cents.
Soybean futures also saw gains, with CBOT July soybean futures settling at $11.70-1/4 per bushel, up 7-1/4 cents. Soymeal futures, however, declined by $2.9 to settle at $349 per short ton.
The market saw volatility as heavy deliveries against CBOT May soy oil futures created initial bearish pressure. Commercial stops and the unwinding of the soy oil/meal trade offset this pressure, resulting in the buying in soy oil and selling of soy meal.
As per trade sources funds bought 3000 contracts of soybean and 1000 contracts soy oil while soy meal saw net selling of 1500 contracts by funds.
ICE canola futures mirrored the gains in soybeans, breaking a five-day decline. The most active July canola contract gained $7.70 to settle at $625.70 per metric ton. Experts caution that canola's strength may be temporary, as beneficial rains over the dry Canadian Prairies reduce fundamental support for prices.
In South America, soy oil trading from Argentina showed a basis of -500 (seller) and -550 (buyer). FOB values were $842.62 (seller) and $831.59 (buyer). Brazilian basis was noted at -550 (seller) and -650 (buyer), with FOB values at $864.66 (seller) and $820.57 (buyer).
Bursa Malaysia and Euronext futures markets were closed for the Labour Day holiday.
US soybean processors crushed a record 203.7 million bushels of soybeans in March 2024. While a record high, the figure missed analyst expectations of 205.6 million bushels. Soybean oil stocks have increased from February but remain lower year-over-year at 2.369 billion pounds.
Analysts note that the recent up move in soy oil is partly technical, driven by short-covering in commercial trader positions. However, underlying fundamentals appear weak due to rising South American production and potentially lower soy oil demand for biofuel. Prices could decline again once technical buying slows.
(By Commoditiescontrol Bureau; +91-9820130172)
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