CBOT Soy Review on Monday: Steady up; uncertain Argentina rain outlooks

 

 

Soybean futures on the Chicago Board of Trade finished Monday's session steady to marginally higher, stabilizing after two-sided action amid uncertainty tied to Argentina weather.

 

CBOT March soybeans finished unchanged at US$10.09. March soy meal settled US$2.00 lower at US$316.30 per short tonne. March soyoil finished 17 points higher at 33.77 cents per pound. Conflicting weather outlooks for drought stricken Argentina crops set the stage for two-sided trade, analysts said.

 

Futures initially propelled to their highest levels since Oct. 3. on drier outlooks for Argentina's crop belt, weakness in the U.S. dollar and technically inspired buying.

 

However, after satisfying a technical objective of eclipsing resistance at three-week highs, private midday weather forecasts calling for improved rain prospects in Argentina and weaker cash basis levels sent buyers running for cover, a CBOT floor analyst said.

 

The absence of the U.S.'s best importer - China - due to the Lunar New Year holiday's this week slowed demand and kept a lid on upside potential as well, traders added.

 

Looking ahead, traders anticipate choppy action will remain constant if weather forecasts continue to conflict in a week void of export demand from China. Traders are taking a cautious approach in the face of Argentine weather risks, with most crops in the region not in their key pod filling stage of development yet.

 

Upper-level high pressure will shift further west than in recent weeks, which will allow the jet stream to flow closer to Argentina's crop regions than in recent weeks and months, according to a forecast from T-storm Weather. For this reason, rain chances are higher next week than recently forecast. However, "we cannot determine exactly when or how a rain event will occur - we can only see that the upcoming pattern suggests the potential for more rain," T-storm Weather said.

 

U.S. soybeans inspected for export in the week ended Jan. 22 totaled 37.390 million bushels, up 0.4% from the previous week. Analysts surveyed by Dow Jones Newswires anticipated inspections in a range of 23 million to 35 million bushels. The primary destination for the soybeans was China, which accounted for 31.001 million bushels.

 

 

Soy product futures ended mixed, with conflicting Argentine weather outlooks and a pullback in soybeans weighing on soymeal. Soyoil futures held firm, supported by meal/oil spread unwinding, traders said.

 

In pit trades, speculative funds were estimated sellers of 1,000 lots in soymeal and buyers of 1,000 lots in soyoil.

 

March oil share ended at 34.63% and the March crush ended at 58 1/4 cents.