June 6, 2009

 

CBOT Soy Review on Friday: Lower; consolidates on strong US dollar

 

 

Chicago Board of Trade soybean futures stumbled Friday, succumbing to consolidative pressures amid strong gains in the U.S. dollar.

 

CBOT July soybeans settled 4 1/2 cents lower at US$12.25 1/2 and November soybeans finished 19 3/4 cents lower at US$10.61 3/4.

 

July soy meal settled US$3.00 lower at US$396.00 per short tonne. July soyoil finished 61 points lower at 39.73 cents per pound. In pit trades, speculative fund selling was estimated at 4,000 lots in soybeans, and 2,000 lots each in soymeal and soyoil.

 

The stronger dollar had a negative effect on the market, with pre-weekend profit-taking associated with futures' run to new 8 1/2 month highs generating price pressure, said Jack Scoville, analyst at Price Futures Group in Chicago.

 

However, strong old crop fundamentals continued to attract buyers on price breaks, supporting the nearby July future as well as bull spreads, Scoville said.

 

The July/November bull spread settled at US$1.65 a bushel, up from Thursday's settlement of US$1.48 1/2 cents. Nearby contracts briefly traded in positive territory, before succumbing to pressure down the stretch.

 

New crop futures stumbled on planting delays in the eastern Midwest amid concerns delays to corn seedings could translate into additional soybean plantings. However, new crop planting delays are a double-edged sword, as it also has the potential to lower soybean yields the longer the delays persist, Scoville said.

 

The DTN Meteorlogix weather forecast calls for continued generally cool weather in the central U.S. during the next five days. Temperatures will be in the range of 5 to 12 degrees Fahrenheit below average; some areas will have readings of 15 degrees Fahrenheit below average.

 

Increasing rain chances for the northern part of the western Midwest region are in the outlook for the weekend. This shower pattern would ease concerns after the recent drier weather pattern in the area. The northern part of the eastern Midwest looks fairly wet next week as well. This sector is also in need of additional rain, Meteorlogix said.

 

 

SOY PRODUCTS

 

Soy product futures lower, faltering on bearish outside market influences and pre-weekend consolidation. Soymeal futures finished lower, but nearby contracts still carved out new highs for the year, as tight availability of nearby supplies remained an underpinning feature. Nearby contracts experienced some two-sided trade, as fundamental strength supported flat prices as well as bull spreads, analysts said.

 

Soyoil futures ended lower, consolidating inside the week's trading range as ample nearby supplies and bearish outside market forces weighed on prices. The market lost ground to meal on spreads as well.

 

July oil share ended at 33.37%. The July soybean crush ended at 83 1/4 cents.