July 15, 2009

 

CBOT Soy Review on Tuesday: Most higher; minor bounce from recent lows

 

 

Soy futures on the Chicago Board of Trade ended mostly higher, staging a minor technical bounce, as the market continued to consolidate from recent lows.

 

CBOT July soys settled 17 1/2 cents lower at US$10.74, August soys ended 16 cents higher at US$10.34 1/2, and November soys finished 6 1/2 cents higher at US$9.18. In pit trades, speculative fund buying was estimated at 3,000 lots in soys, and 1,000 lots in soyoil.

 

July soy meal settled US$14.80 lower at US$344.50 per short tonne, and December soymeal ended US$0.50 higher at US$283.00. December soyoil finished 39 points higher at 34.46 cents per pound.

 

Supportive export demand, a lack of improvement in weekly crop ratings and the absence of fresh bearish news helped the market find value for buyers, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

End user buying is stepping up and that's a signal that soys have found value at current levels, Scoville said.

 

Meanwhile, technically oversold market conditions and supportive outside market influences in early action helped underpin prices. Nevertheless, favorable weather conditions for crop development remained a negative feature for prices, but it is seemingly factored into prices already, said Vic Lespinasse, an analyst with GrainsAnalyst.com.

 

Otherwise activity was subdued, with traders eyeing the expiration of July futures, as traders liquidated positions in the contract before its 1:00 p.m. EDT expiration.

 

Ahead of the day session opening, U.S. Department of Agriculture announced private export sales of 130,000 metric tonnes of soys for delivery to unknown destinations in the 2009-10 marketing year, and private export sales of 42,000 metric tonnes of soyoil for delivery to unknown destinations for the 2008-09 marketing year.

 

The DTN Meteorlogix forecast calls for a continued generally beneficial weather pattern over the Midwest. The pattern features mild temperatures and periodic showers. This is a mostly favorable weather pattern for developing soys. Hot temperatures, if any, will be brief and mainly confined to western and southern areas.

 

 

Soy Products

 

Soyoil futures climbed Tuesday, rising on technical buying and supportive export demand. The market managed to break out of a recent sideways trading pattern on technical charts, with fresh export sales providing enough support to offset pressure from much-higher-than-expected stocks reported in the National Oilseed Processors Association monthly crush report.

 

Soymeal futures edged higher, in step with price action in soys. However, adjustments in the meal/oil spread relationship and the liquidation of July contracts weighed on prices, traders said.

 

December oil share was 37.79%, while the November/December soy crush ended at 83 3/4 cents.