June 26, 2007

 

CBOT Soy Review on Monday: Higher; consolidates prior losses

 

 

Chicago Board of Trade soybean futures ended higher Monday, climbing from Friday's steep losses on a consolidative bounce amid supportive longer- range outlooks.

 

July soybeans settled 7 1/4 cents higher at US$8.04 1/4, and November soybeans finished 7 3/4 cents higher at US$8.38 1/2. July soymeal settled US$2.70 higher at US$220.10 per short tonne. July soyoil ended 35 points higher at 35.08 cents a pound.

 

The market has a supportive longer-term theme, and with the issues of a long growing season still ahead and the need to entice South American producers into increasing next year's acreage, futures found underlying strength to stabilize prices, said Roger Knapp, analyst with STA Trading Services in Memphis, Tenn.

 

The market absorbed heavy losses last week and was overdue to find some stability, said a CBOT floor analyst.

 

The exhaustion of speculative fund selling pressure, the ability of prices to hold technical support and weather forecasts calling for warmer, drier conditions in longer- range models added strength to aid the firm tonnee, analysts added.

 

Nevertheless, spillover weakness from corn and improved crop conditions following recent Midwest rains managed to keep a lid on advances, promoting a quiet sideways trading session, traders said.

 

The DTN Meteorlogix forecast calls for rainfall of up to one-half inch in the Midwest this week, followed by generally warm and dry conditions during the next six to 10 days, going through the Independence Day holiday. Even with the improvement to soil moisture in the Midwest over the past three to five days, additional timely rains will be needed from eastern Iowa through Illinois and western Indiana to ward off crop stress during pollination.

 

The dry areas of the far eastern Midwest will receive little notable rainfall in the next week and a half; crop stress in this area will continue to be significant, Meteorlogix reports.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT on Monday. Analysts anticipate U.S. soybean good-to-excellent crop ratings rising in a range 2 to 4 percentage points.

 

In pit trades, Kottke bought 400 November, Fimat bought 300 November. Speculative fund buying was estimated at 3,000 contracts. ADM Investor Services sold 600 November, UBS Securities and Iowa Grain each bought 200 July, and Man Financial sold 200 November.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, rising in unison with advances in soybeans. Soymeal futures ended up, bouncing on technical buying, with the ability of futures to hold above major moving averages attracting buying interest, analysts said.

 

Soyoil futures ended higher, bouncing back from last week's downtrend on light speculative-led buying, analysts said. The market's downside moves were a little overdone, and with soybeans bouncing higher, futures uncovered speculative buying, analysts added.

 

July oil share ended at 44.38% and the July crush ended at 66 1/4 cents.

 

In soymeal trades, ADM Investor Services bought 500 August and JP Morgan sold 400 August and 300 September, Speculative funds were estimated buyers of 1,000 lots.

 

In soyoil trades, UBS Securities bought 700 August and 300 September, and ADM Investor Services and Rand Financial each bought 300 December. Speculative fund buying was estimated at 3,000 lots. Sellers were lightly scattered among various commission houses.