June 27, 2007

 

CBOT Soy Review on Tuesday: Settles up; weather, spillover underpin

 

 

Chicago Board of Trade soybean futures ended higher Tuesday, underpinned by weather uncertainties and spillover support from sharply higher wheat futures.

 

July soybeans settled 2 3/4 cents higher at US$8.07, and November soybeans finished 3 1/2 cents higher at US$8.42. July soymeal settled unchanged at US$220.10 a short tonne. July soyoil ended 10 points lower at 34.98 cents a pound.

 

Weather forecasts calling for the return of hot, dry weather conditions in the Midwest next week provided support to prices, with borrowed momentum from a price spike in wheat futures lending strength to the higher tonnee, analysts said.

 

Supportive longer-range fundamental outlooks, with forecasts for tightening supplies, remain bullish influences to keep a floor beneath the market, analysts added.

 

However, upside movement was held in check by the exhaustion of buying at session highs, with traders taking the opportunity to square a few positions ahead of Friday's crop reports, a CBOT floor trader said.

 

Otherwise, activity was relatively quiet, with the market content to continue its consolidative phase following last week's sharp declines, traders added.

 

The U.S. Department of Agriculture is scheduled to release its annual acreage and quarterly grain stock reports Friday at 8:30 a.m. EDT (1230 GMT). The average of 20 analysts' estimates pegged 2007 soybean acreage at 67.838 million acres, up from the prospective planting figure of 67.140 million. The average was from a range of 66 million to 69 million acres. Quarterly grain stocks were pegged at 1.076 billion bushels from a range from 909 million to 1.120 billion. Fifteen analysts participated in the stocks survey.

 

The DTN Meteorlogix forecast calls for rainfall of up to one inch of rain from Wednesday to Friday south of a line from Columbia, Mo., east to Daytonne, Ohio. This outlook offers the potential for some timely rainfall in an area of the Midwest, which didn't take in the heaviest rainfall of late last week. Elsewhere in the Midwest, seasonal temperatures will allow continued favorable crop development weather.

 

Major forecast weather models indicate Tuesday morning the formation of upper-atmosphere high pressure over the western and southern Midwest during next week. As a result, the U.S. corn-belt faces a period of weather featuring above-normal temperatures and generally below-normal rainfall. Thus, the prospect of heat is something that has to be closely monitored, Meteorlogix reports.

 

In pit trades, Rand Financial bought 1,500 November, Man Financial and UBS Securities each bought 400 November, and Tenco and Penson GHCO each bought 300 November. Tenco and Citigroup each sold 300 November. Speculative fund buying was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, quietly consolidating prior losses, analysts said. Soyoil futures finished lower, pressured by spillover weakness from Asian palm oil futures and declines in crude oil futures, they said.

 

Soymeal futures ended marginally higher, continuing their consolidation of last week's losses, according to analysts. Technical buying aided the higher tonnee, with the ability of nearby soymeal futures to hold above their 100-day moving averages attracting light buyers, traders said.

 

The July oil share ended at 44.28% and the July crush ended at 62 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses, with speculative funds net buyers on the day.

 

In soyoil trades, Rand Financial bought 300 December, ADM Investor Services sold 400 July and 400 August, and Rand Financial sold 300 December.