July 21, 2009

 

CBOT Soy Review on Monday: Mixed close on bull spreading

 

 

Soy complex futures at the Chicago Board of Trade closed mixed Monday. The old-crop August soy futures closed higher, and new-crop November futures ended slightly lower. Bull spreading was featured in the day, said a market analyst.

 

August soys closed up 22 1/2 cents at US$10.32 a bushel. New-crop November soys were down 2 3/4 cents at US$9.20 3/4.

 

Continued good growing weather for soys in the U.S. midsection provided pressure to the deferred contracts Monday, said Victor Lespinasse, longtime market analyst with www.grainanalyst.com. However, Lespinasse said the good growing weather in the Corn Belt is probably now mostly factored into the present soy futures pricing structure.

 

The U.S. Corn Belt forecast this week calls for more mild temperatures and scattered rainfall chances. The National Weather Service 6-to-10-day forecast for July 25-29 calls for below-normal temperatures and normal to above-normal precipitation for the Corn Belt.

 

The nearby August soy futures contract posted solid gains amid a continued tight supply-and-demand balance sheet for old-crop soys. There were also some rumors circulating in the market that China may be interested in purchasing old-crop U.S. soys, said Brian Hoops with Midwest Market Solutions. He added that those rumors did somewhat conflict with recent reports that China will auction some of its soy stocks soon.

 

The key "outside markets" were in a mildly bullish posture for the complex, as the value of the U.S. dollar was lower against other currencies, while crude oil and the U.S. stock indexes were firmer.

 

The technical picture has also improved somewhat for the soy market, said Lespinasse. November soys on Friday closed at a bullish weekly high close. Short-covering in a market that is still overall near-term technically bearish was featured Friday and Monday, said a technical analyst. However, he said prices are still trading below a 6-week-old downtrend line on the daily bar chart.

 

Commercial traders of CBOT soy futures shed short positions in the latest reporting week, according to the latest commitments of traders report issued by the Commodity Futures Trading Commission on Friday afternoon. Commercials reduced their net short positions by 15,975 contracts, to total 258,097 contracts. Meantime, large speculative traders of soy futures reduced their net long positions by 12,058 contracts, to total 67,124 contracts. The index or fund traders category showed soy traders reduced their net short positions by 1,138 contracts, to total 18,071 contracts.

 

Soy futures on the Dalian Commodity Exchange in China closed higher Monday, in line with Friday's gains in Chicago. A continued rebound in crude oil and metals prices as well as some favorable economic news prompted buying interest.

 

 

Soy Products

 

Soy product futures at the Chicago Board of Trade closed mixed Monday, with soy meal lower and soy oil higher. Spreaders were featured selling the meal and buying the bean oil, said an analyst.

 

December soy meal closed down US$3.20 at US$275.50 a tonne, while December bean oil closed up 39 points at 35.91 cents a pound.

 

Soy meal was pressured by the ongoing good growing weather in the U.S. Corn Belt, while soy oil was supported by firmer crude oil prices, said the analyst.