April 5, 2007
CBOT Soy Review on Wednesday: Ends lower amid bearish weather forecasts
Chicago Board of Trade soybean futures ended lower Wednesday, succumbing to late speculative selling amid bearish weather forecasts and corn/soybean spreading.
May soybeans ended 2 3/4 cents lower at US$7.61, and November soybeans finished 2 cents lower at US$8.05 1/4. May soymeal settled US$1.30 lower at US$213.20 per short tonne. May soyoil ended 20 points higher at 32.57 cents a pound.
The market held firm for most of the day, but without any fresh bullish news and the potential for a possible increase in soy acres if Midwest weather produces corn planting delays, attracted speculative sales down the stretch, analysts said.
Technical strength and bullish long range fundamental outlooks served as underpinning forces, but the late spec sales triggered sell-stop orders, driving prices through key major moving average support, traders added.
Cold, wet Midwest weather has the makings for delaying corn plantings, and if its too wet to plant corn, farmers will look to beans, a CBOT floor analyst said. With quality corn seeds limited this year, farmers will remain conservative on early corn plantings, amid the risk of having to replant if early problems surface, he added.
Meanwhile, light profit taking pressure and the willingness of traders to spread corn against soybeans served as a late influence to pin prices in negative territory down the stretch, traders said.
The DTN Meteorlogix forecast calls for temperatures to plummet to as low as 25 degrees below average during the next five days in the Midwest. Low temperatures in the teens to low 20s Fahrenheit are likely, especially west of the Mississippi River, Iowa and Minnesota. This cold-weather trend is unwelcome for field work progress, and will also slow drying of soil. In addition, there is a high likelihood that soil surfaces will freeze due to the cold weather.
Argentina's central corn and soybean belt will have a slow drying trend during the last half of this week. Harvest progress is still notably delayed due to heavy rainfall last week. In southern Brazil, Rio Grande do Sul more storms are in the mix during the remainder of this week as well. This continued shower and thunderstorm trend will curtail harvest in Rio Grande do Sul, Meteorlogix forecasts.
On tap for Thursday, U.S. Department of Agriculture is scheduled to release weekly export sales figures for the week ended March 29 at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimated sales would range from 300,000 to 350,000 metric tonnes. Soymeal commitments were estimated in a range of 75,000 to 125,000 tonnes and soyoil sales were estimated in a range of zero to 10,000 tonnes.
In pit trades, Buyers and sellers were scattered among various commission houses with, Penson GHCO a seller of 1,000 May and Iowa Grain a seller of 400 July.
SOY PRODUCTS
Soy product futures ended mixed, with soyoil futures divorcing itself from the weakness experienced in the rest of the complex. Soyoil was buoyed by spreading between the products, but prices continued to trade in a sideways pattern consolidating inside Tuesday's trading ranges, analysts say.
Soymeal futures ended lower, moving in unison with declines in soybeans. A bearish technical price, with active contract trading firmly below major moving average resistance and late weakness in soybeans laid the groundwork for prices to grind lower, traders said.
May oil share ended at 43.31% and the May crush ended at 66 1/4 cents.
In soyoil trades, Speculative fund buying was estimated at 3,000 contracts. Fimat bought 400 May, JP Morgan bought 500 May, Citigroup bought 300 May, ADM Investor Services bought 200 May, with additional buying scattered among various commission houses. Bunge Chicago sold 300 May and 1,000 July.
In soymeal trades, buying and selling was widely scattered among firms with ADM Investor Services a buyer of 400 December, JP Morgan a seller of 700 July and UBS Securities selling 600 May.
