July 28, 2007

 

CBOT Soy Review on Friday: Lower; continues consolidation phase

 

 

Chicago Board of Trade soybean futures ended lower Friday, closing out the week on the defensive as the market continued its consolidative, sideways trend after an early week price stumble.

 

August soybeans settled 6 cents lower at US$8.15 1/2, and November soybeans finished 6 cents lower at US$8.40 1/2. August soymeal settled US$4.10 lower at US$213.60 per short tonne. August soyoil ended 17 points higher at 36.76 cents a pound.

 

A quiet news front provided little direction for prices, with benign near-term Midwest weather conditions limiting upside enthusiasm, analysts said. Traders were seemingly content to even a few positions ahead of the weekend until new weather outlooks can be verified Monday morning, analysts added.

 

However, the uncertainty of longer range weather outlooks, with soybean crops headed into their critical pod-filling stage of development provided underpinning support to keep prices holding within a week long trading range, a CBOT floor analyst said.

 

Otherwise, futures were influenced by better than expected coverage of rain showers overnight, but with lingering concerns over dryness in Minnesota and reports of heavy aphid populations in Iowa, futures were unable to muster aggressive movement in either direction, he added.

 

Light support was also generated from soyoil, which climbed on strength in outside energy markets, traders said.

 

The DTN Meteorlogix forecast calls for showers to continue in the eastern and southeastern Midwest during the weekend, with drier weather elsewhere. Some heat stress will return to the Dakotas and Minnesota, where crop stress has been notable in the past two weeks. In this sector of the Midwest, high temperatures will range from 88 to 93 Fahrenheit Monday, and 90 to 96 F Tuesday-Wednesday; with the hottest readings west and north. The balance of the Midwest will have favorable weather through the middle of next week, Meteorlogix reports.

 

Meanwhile, major forecast models agree in the outlook for the six-to-ten-day period, ending Monday, Aug. 6. A series of cold fronts will move from the Canadian Prairie southeast into the Midwest; first on Wednesday and Thursday of next week, and then during the follwing weekend. This scenario brings a better chance for rain to the entire central U.S., including the dry northwestern Corn Belt. If this outlook is borne out, late-season row-crop weather will take a notable turn toward more favorable conditions for corn and soybeans, Meteorlogix reports.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses. Speculative funds were estimated net sellers of 1,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Friday. Soymeal futures stumbled lower, closely following the movement of soybeans in the absence of fresh fundamental news to direct prices, analysts said.

 

Soyoil futures managed to gain product share from soymeal, garnering strength from higher outside energy futures and overnight price gains in Malaysian palm oil futures, analysts said. Otherwise activity was subdued, with oil/meal spreading featured.

 

August oil share ended at 46.25% and the August crush ended at 58 3/4 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses, with speculative funds net sellers of 2,000 lots on the day.

 

In soyoil trades, Bunge Chicago and Rand Financial were each buyers of 300 December, while sellers were thinly scattered among various commission houses. Speculative fund buying was estimated at 2,000 lots.