July 1, 2009

 

CBOT Soy Review on Tuesday: Old crop fundamentals lift July beans

 

 

Chicago Board of Trade soy futures ended mostly lower Tuesday, aside from the July future that climbed on bullish old crop supply and demand fundamentals.

 

CBOT July soys settled 11 1/4 cents higher at US$12.26 1/4 and November soys finished 2 1/2 cents lower at US$9.81. In pit trades, speculative fund selling was estimated at 3,000 lots in soys and 2,000 lots in soyoil.

 

July soy meal settled US$0.90 higher at US$412.30 per short tonne, and December soymeal ended US$1.90 higher at US$306.30. December soyoil finished 70 points lower at 35.90 cents per pound.

 

Tight old crop fundamentals supported the front end of the market, with bull spreads widening to new highs. The July future divorced itself from the rest of the market on the tight stocks, able to ignore bearish outside market influences, a cash connected CBOT broker said.

 

The July/August spread settled at a US$1.07 cent inverse Tuesday, and the July/November spread settled at a US$2.45 1/4 cent inverse.

 

The announcement of a new 113,000 metric tonne sale of U.S. soys to China for delivery in the 2008-09 marketing year, kick-started the bounce in the July futures after a lower start, traders said

 

Spillover pressure from limit-down corn futures, declines in wheat and weakness in crude oil and equities weighed on the rest of the market. A lower-than-expected acreage estimate provided light support, but the figure was still record large, limiting its impact on prices, said John Kleist, broker/analyst with Allendale Inc.

 

However, midday weather models showing the potential for a heat dome to move into the central U.S. next week provided support to briefly support prices, said Dan Basse, president AgResouce Co.

 

T-Storm Weather LLC said the latest GFS weather model keeps hot weather in the central U.S. beyond late next week - a "heat dome" centered near Kansas, western Missouri, southwest Iowa, southeast Nebraska, and Oklahoma around July 10-11.

 

U.S. 2009 soy planted area of 77.5 million acres is a record high and a 2% gain over 2008, the U.S. Department of Agriculture said in its annual acreage report. The USDA estimates harvested area at 76.5 million acres, up 3% from 2008. If realized, this would be the largest harvested acreage ever for soy.

 

 

Soy Products

 

Soy product futures ended mixed, with soymeal gaining product share on spreads amid tight availability of high protein meal supplies and strength in soys. Soymeal bull spreads widened to new highs in step with soys.

 

Soyoil futures stumbled, succumbing to meal/oil spreading, spillover weakness from crude oil futures, abundant stocks and heavy deliveries posted against the July future, John Kleist said.

 

July oil share slipped to 29.67%, while the July soy crush ended at 83 3/4 cents.