June 19, 2008

 

CBOT Soy Review on Wednesday: Consolidates lower on cautious selling

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, consolidating prior gains as the market took a cautious approach amid the uncertainties of 2008 planted acreage.

 

July soybeans settled 2 cents lower at US$15.56 and November soybeans ended 10 cents lower at US$15.43. July soymeal settled US$2.10 higher at US$417.10 per short tonne. July soyoil finished 34 points lower at 65.46 cents per pound.

 

Improved weather forecasts for a potential return to field work in the Midwest, raised speculation of increased soybean plantings, analysts said. Flooded Midwest fields are expected to entice producers into seeding soybeans, as corn has moved well past optimal yield dates for seeding or re-seeding flooded out acres, analysts added.

 

Speculation that an easing of tension between farmers and the Argentine government could open export avenues for Argentina and stymie U.S. demand applied light pressure to prices as well, a CBOT floor broker said.

 

The volatile movements of crude oil futures influenced prices as well, with early weakness in energies applying pressure, while a late bounce in crude oil sparked short covering down the stretch, analysts added.

 

Nevertheless, lingering logistic problems in the Midwest, with stymied rail and barge movement as a result of flooding is pressing interior basis levels while firming the basis at the U.S. Gulf of Mexico, traders said.

 

The Midwest is in for a quieter weather pattern in the next couple of weeks, with more limited precipitation and a gradual warming trend across the region, said David Streit, meteorologist with Cropcast Weather Services.

 

In general, rains in the Midwest will be limited at least on a widespread basis during the next week to 10 days, forecasters said. The Midwest isn't expected to be void of precipitation, but a change to a warmer, drier pattern is setting up for the region.

 

"Temperatures will average two to four degrees below average this week, but by early next week temperatures will climb to one to two degrees above normal," Streit said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal garbing product share on spreads. Soymeal futures ended higher, buoyed by underlying demand and technical strength, analysts said. Active contracts climbed to new contract highs, traders said.

 

Soyoil futures ended lower, falling under the weight of meal/oil spreading, with spillover weakness from crude oil futures for most of the day helping pin prices in negative territory, analysts said.

 

July oil share ended at 43.97% and the July crush ended at 81 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.