June 30, 2009

 

CBOT Soy Review on Monday: Mixed; beans, meal bull spreads rise

 

 

Soy futures at the Chicago Board of Trade ended mixed Monday, with nearby old crop contracts rallying on tight supplies while new crop stumbled on favorable crop conditions.

 

CBOT July soys settled 14 cents higher at US$12.15 and November soys finished 7 1/2 cents lower at US$9.83 1/2. In pit trades, speculative fund selling was estimated at 4,000 lots in soys, 1,000 lots in soymeal and 2,000 lots in soyoil.

 

July soy meal settled US$6.40 higher at US$411.40 per short tonne, and December soymeal ended US$1.60 lower at US$304.40. December soyoil finished 29 points lower at 36.60 cents per pound.

 

Bull spreads were featured once again, with market participants comfortable holding long July positions amid the limited risk of being delivered upon on first notice day Tuesday, analysts said.

 

The July/August spread settled at a 93 cent inverse Monday, and the July/November spread settled at a US$2.31 1/2 cent inverse.

 

The July/Nov differential climbed to new highs for the spread.

 

Deliveries against CBOT July soy and soymeal contracts on first notice day Tuesday are expected to be nonexistent, while soyoil notices have the potential to be large based on ample U.S. supplies, analysts said.

 

New crop futures had two things working against them, favorable near term weather conditions for U.S. soy crops and outlooks for a jump in soy acres in Tuesday's acreage report.

 

The mixed tonnee was consistent, with strong gains in crude oil and equities providing some outside support for nearby contracts, analysts said.

 

Otherwise, positioning ahead of Tuesday's first notice day for July futures and the U.S. Department of Agriculture acreage and stocks report were features promoting the mixed theme.

 

The U.S. Department of Agriculture is expected show a moderate increase in soy acreage from its March prospective plantings report with soy stocks as of June 1 reflecting solid third-quarter usage in its reports scheduled for release Tuesday 8:30 a.m. EDT (1230 GMT).

 

Analysts surveyed by Dow Jones estimate soy acreage at 78.305 million acres, up 2.281 million acres from the March projection of 76.024 million. The estimates from the 18 analysts surveyed ranged between 75.300 and 79.631 million acres. USDA is expected to report soy stocks at 586 million bushels in its quarterly Grain Stocks report.

 

The DTN Meteorlogix weather forecast calls for generally favorable weather conditions for developing corn and soys during the next week to 10 days. Scattered rain showers may cause some disruptions to double-crop soy planting after the wheat harvest; however, delays will be much shorter than those that occurred earlier in the season.

 

 

Soy products

 

Soy product futures ended mostly lower, but nearby soymeal contracts rallied with soys on a lack of fear of deliveries. Tight availability of high protein soy meal continues to promote price strength in old crop soymeal futures, analysts said.

 

Soyoil futures stumbled, retreating on meal/oil spreading, end of month and quarter positioning and ample domestic soyoil supplies, analysts said,

 

July oil share slipped to 30.34%, while the July soy crush ended at 83 3/4 cents.