June 25, 2009

 

CBOT Soy Review on Wednesday: Futures up, continuing recovery

 

 

Chicago Board of Trade soy futures ended higher Wednesday, continuing its recovery from recent declines on technical buying and supportive fundamentals.

 

CBOT July soys settled 6 cents higher at US$11.85, and November soys finished 3 1/2 cents higher at US$10.08. In pit trades, speculative fund buying was estimated at 4,000 lots in soys and 1,000 lots each in both soymeal and soyoil.

 

July soymeal settled US$4.00 higher at US$392.50 per short tonne. July soyoil finished 49 points lower at 36.44 cents per pound.

 

The market was supported by tight old crop stocks and uncertainty tied to new crop production, but advances were held in check by spillover pressure from grain futures and a firmer U.S. dollar, said Mike Zuzolo, analyst with Risk Management Commodities in Lafayette, Ind.

 

Technical buying helped lift prices as well, with the ability of the most active November contract to hold above its 50-day moving average seen as a supportive feature, analysts said.

 

The absence of fresh fundamental news promoted a consolidative theme, with traders taking a cautious approach ahead of the delivery period for July futures and the key June 30 government acreage report.

 

Otherwise, favorable near-term weather conditions tempered advances in new crop contracts, allowing bull spreads to widen their differential on the close.

 

The DTN Meteorlogix weather forecast said showers and thunderstorms will produce moderate to locally heavy rain of up to 1.5 inches in the northern Midwest over the next few days. Greatest activity will be seen in northern Iowa and southern Minnesota.

 

Meanwhile, crops in Missouri, southern Illinois, and the Mississippi Delta, as well as portions of the southeastern U.S., will continue to see a stressful hot and dry weather pattern. This trend should continue during the next five days. High temperatures of 95-100 degrees Fahrenheit during this timeframe will dry out soils and increase stress to soys, Meteorlogix said.

 

On tap for Thursday, The U.S. Census Bureau will release its May soy crush report at 8 a.m. EDT, (1200 GMT). The Census Bureau is expected to estimate the May soy crush at 148.8 million bushels, up from last month on a recovery in processor activity, according to a survey of industry analysts.

 

May soymeal stocks are seen rising to 435,000 short tonnes, up from the 421,800 tonnes reported for April. Soyoil stocks are seen climbing to 3.220 billion pounds in the report, up from 3.159 billion the previous month. In the NOPA report, soyoil stocks saw a 25.8 million-pound decrease in stocks.

 

The U.S. Department of Agriculture weekly export sales report is scheduled to be released at 8:30 a.m. EDT, and analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended June 18 in a range of 50,000 to 450,000 metric tonnes. Soymeal export sales are seen between 75,000 and 300,000 tonnes, while soyoil sales are pegged between zero and 20,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal gaining product share on adjustments in the meal/oil spread relationship. Meal bounced in unison with soys, extending its recovery from recent declines, with supportive old crop fundamentals serving as underpinning features, analysts said.

 

Soyoil futures finished lower, stumbling on meal/oil spreading and spillover weakness from crude oil futures. The spreads and crude oil losses overshadowed supportive export sales reported by USDA.

 

July oil share slipped to 31.72%, while the July soy crush ended at 79 1/4 cents.