July 14, 2009

 

CBOT Soy Review on Monday: Backpedals on bearish weather conditions

 

 

Chicago Board of Trade soy futures ended lower Monday, backpedaling on bearish near term weather forecasts and speculative long liquidation.

 

CBOT July soys settled 36 3/4 cents lower at US$10.91 1/2 and November soys finished 5 1/2 cents lower at US$9.11 1/2. In pit trades, speculative fund selling was estimated at 3,000 lots in soys, and 1,000 lots in soymeal. Speculative funds were estimated net buyers of 1,000 lots in soyoil.

 

July soy meal settled US$13.00 lower at US$359.30 per short tonne, and December soymeal ended US$6.80 lower at US$282.50. December soyoil finished 60 points higher at 34.07 cents per pound.

 

Beneficial weather conditions for developing crops across the central U.S. were a driver of the market, said Vic Lespinasse, analyst with Grainsanalyst.com.

 

The lack of a weather threat to Midwest crops, and lingering uncertainty surrounding global economies and their affect on world soy demand enticed traders into liquidating longs in an effort to reduce risk exposure, analysts said.

 

A quiet news front kept the defensive tonnee intact, with the unwinding of bean/corn, and bean/wheat spreads contributing to the lower theme, traders said. The market continued to trade in a recent sideways trend awaiting fresh directives, eyeing weather forecasts and outside financial markets.

 

Meanwhile, the unwinding of July/November soy spreads enabled the November contract to end at session highs, with oversold market conditions aiding the late bounce, traders said.

 

The DTN Meteorlogix forecast calls for generally beneficial conditions over the Midwest during the coming week. A round of timely rainfall is slated for drier western and southern areas. In addition, hot temperatures, if any, will be brief and mainly confined to west and south areas, according to Meteorlogix.

 

In the Delta, very hot temperatures will continue for a few more days. Cooler weather and increasing shower activity is in store for later this week and early next week, Meteorlogix forecasts.

 

On tap for Tuesday, the National Oilseed Processors Association will release its monthly soy crush report for June at 8:30 a.m. EDT. The report is expected to show a decline in soy crush rates for June to near 133.7 million bushels from the previous report, according to a survey of industry analysts. NOPA soyoil stocks in June are expected to increase to near 2.696 billion pounds, from the 2.684 billion pounds reported for May.

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil escaping the negative tonnee filtering through the complex. Soyoil was buoyed by soymeal/soyoil spread unwinding, fresh export demand news and technical buying, traders said.

 

Soymeal futures stumbled Tuesday, succumbing to the speculative selling pressure. The bearish influence of improved weather conditions for soys weighed on prices, with the aversion of risk by speculative longs attracting selling pressure as well, analysts said.

 

December oil share was 37.64%, while the November/December soy crush ended at 84 3/4 cents.