June 19, 2009

 

CBOT Soy Review on Thursday: Mixed; nearbys bounce, technical buys, demand

 

 

Soy futures on the Chicago Board of Trade ended mixed Thursday, with nearby contracts bouncing on a combination of technical buying and renewed concerns surrounding tight old crop supplies.

 

CBOT July soy settled 7 1/2 cents higher at US$12.13 3/4 and November soy finished 6 1/2 cents lower at US$10.43 1/2. In pit trades, speculative fund buying was estimated at 4,000 lots in soy, and 1,000 lots in soymeal. Speculative funds were estimated net sellers of 2,000 soyoil contracts.

 

July soy meal settled US$5.00 higher at US$405.40 per short tonne. July soyoil finished 15 points lower at 36.95 cents per pound.

 

Old crop, nearby contracts were buoyed by solid weekly export sales, as traders were encouraged by fresh buying from China, analysts said. After two straight weeks of China cancelling previous purchases, their return to the market raised concerns that old crop demand may not be rationed yet, amid a recent pick up in the domestic crush, said Don Roose, president of U.S. Commodities in West Des Moines Iowa.

 

Old/new crop spreading was featured, with the spread differential widening out despite the recent trend of traders liquidating out of July positions.

 

The July/November bull spread settled at US$1.70 a bushel, up from Wednesday's settlement of US$1.56 1/4 cents.

 

New crop futures stumbled lower, pressured by weather outlooks projecting favorable conditions for crop development heading into next week.

 

Otherwise, mixed signals from outside markets left futures without any other clear directives, keeping the market in a consolidative phase, as traders gear up for July deliveries and key end-of-month stocks and acreage reports.

 

The DTN Meteorlogix weather forecast said central U.S. temperatures will generally be from 3 degrees to 7 degrees Fahrenheit above normal during the next five days. The warmer weather continues in the six-to-10-day outlook as well. The hotter temperatures should help fields in southern areas dry out, improving conditions for planting, Meteorlogix said.

 

Meanwhile, the U.S. Department of Agriculture reported total weekly soy export sales were a net 250,700 metric tonnes for the week ended June 11. Sales for 2008-09 were a net 145,700 metric tonnes. The sales included purchases from China totaling 49,900 metric tonnes for delivery in the 2008-09 marketing year and 60,000 tonnes for delivery in the 2009-10 marketing year.

 

 

Soy Products

 

Soymeal futures ended mixed, with a recovery in bull spreads energizing the front end of the market. Supportive weekly export sales, and talk in the industry of processors having a tough time securing soy for crushing, provided underlying support, analysts said.

 

Soyoil futures stumbled, succumbing to adjustments in the meal/oil spread relationship.

 

July oil share slipped to 31.31%, while the July soy crush ended at 84 3/4 cents.