Fund buying tied to ongoing hot/dry weather forecasts for Argentina supported the CBOT soy trade through Wednesday. Soyoil paced the day’s gains, with March closing above it’s 200 day moving average for the first time since late November. Commodity fund traders were estimated as buyers of; 3,000 contracts in the soybean and soybean oil markets, and 2,000 contracts in the soybean meal market.
The spot soybean crush spread remains well above last year with the spot January spread up 1.25 cents on Wednesday at $1.03/bu versus $.73/bu a year ago. On a spot basis, combined product values are unchanged from the same week last year, though the strong margins are realized due to lower soybean prices.
The CBOT is offering soy processors the opportunity to lock in an average crush margin of $1.02/bu to the end of the year, versus $.80/bu last year and the 5 year average of $.70. This looks to keep crush demand strong in the months ahead, and supports the USDA forecast for a record large 2017/18 soybean crush rate.
The afternoon weather stays dry for key Argentine soybean areas, which looks to support the CBOT soybean/meal markets into the end of the week.
