June 28, 2007

 

CBOT Soy Review on Wednesday: Drifts lower on grain weakness, weather

 

 

Chicago Board of Trade soybean futures finished Wednesday's session posting moderate declines, easing lower on spillover pressure from grain futures and less threatening near term weather forecasts.

 

July soybeans settled 3 1/2 cents lower at US$8.03 1/2, and November soybeans finished 4 1/2 cents lower at US$8.37 1/2. July soymeal settled US$2.20 lower at US$217.90 per short tonne. July soyoil ended 2 points lower at 34.96 cents a pound.

 

The absence of fresh directive news promoted a consolidative theme, with the market continuing to hover within Friday's wide trading range, analysts said.

 

Trade consolidation and position squaring ahead of Friday's acreage and stocks reports were featured attractions.

 

There is not enough of a weather threat to spark a rally, and with underlying support from wheat futures drying up, buyers had little incentive to push prices, said Dan Basse, president of AgResource Co. in Chicago.

 

Nevertheless, futures continued to hover within a recent trading range, with longer range supportive fundamental outlooks keeping a floor beneath prices, traders said. The inability of prices to breach overhead resistance at Friday's highs applied pressure to cap upside movement, 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. 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 of 909 million to 1.120 billion. Fifteen analysts participated in the stocks survey.

 

The Census Bureau's May soy crush report is scheduled for release Thursday at 8 a.m. EDT. U.S. soybean crush for May is expected to be 150.5 million bushels, up from the April crush figure of 144.9 million bushels. May soymeal stocks are seen decreasing to 315,400 short tonnes, down from the 328,585 reported for April. Soyoil stocks are seen increasing to 3.321 billion pounds in the report, up from 3.287 billion the previous month.

 

The USDA is scheduled to release weekly export sales figures at 8:30 a.m. EDT Thursday. Analysts predict soybean sales of 100,000 to 300,000 metric tonnes.

 

The DTN Meteorlogix forecast calls for thundershowers through Wednesday night, mainly in an area from central Illinois east to central Ohio and south to the Ohio River. Rainfall of up to one inch is in store for this area. This moisture will allow continued favorable crop development going into the pollination phase of the corn crop.

 

Major forecast weather models Wednesday morning point to a diminished threat of upper-atmosphere high pressure ridge development over the Midwest during the first week of July next week. Temperatures will vary, from above normal early next week to normal or below normal later in the week. In addition, showers will occur with near-normal precipitation, Meteorlogix forecasts.

 

In pit trades, buyers were lightly scattered among various commission houses. Fimat sold 400 November, Man Financial sold 400 July, Kottke sold 300 November and RJ O'Brien sold 1,500 November. Speculative fund selling was estimated at 4,500 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly lower, continuing their consolidative phase, analysts said. The absence of fresh fundamental news continued to keep futures moving in step with soybeans, but light soyoil/soymeal spreading did manage to allow soyoil to garner some product share, analysts added.

 

July oil share ended at 44.51% and the July crush ended at 60 1/2 cents.

 

In soymeal trades, ADM Investor Services bought 400 August, Rand Financial sold 600 December and UBS Securities sold 500 August. Speculative fund selling was estimated at 2,500 lots.

 

In soyoil trades, ADM Investor Services bought 300 July, Bunge Chicago bought 300 August, Fimat bought 400 September, Rand Financial and UBS Securities each bought 300 December. Citigroup sold 400 July, ADM Investor Services sold 300 July and Bunge Chicago sold 300 December. Speculative funds were estimated sellers of between 1,000 and 2,000 lots.