July 28, 2009

 

CBOT Soy Review on Monday: Mostly lower on favorable crop weather

 

 

Chicago Board of Trade soy futures ended mostly lower Monday, with deferred-month contracts backpedaling on favorable weather for developing crops.

 

CBOT August soys ended 1/4 cent higher at US$10.21 1/4, and November soys finished 8 1/2 cents lower at US$9.06 1/2. In pit trades, speculative fund selling was estimated at 2,000 lots in soys and 1,000 lots each in soymeal and soyoil.

 

December soymeal ended US$3.50 lower at US$276.20. December soyoil finished 29 points lower at 34.30 cents per pound.

 

A quiet news front and good weather conditions for central U.S. soy crops was the recipe for lower price action, said John Kleist, broker/analyst with Allendale Inc.

 

The lack of definitive outside market influences kept weather in focus, allowing traders to revert back to bull spreading, Kleist said.

 

Tight old-crop inventories and beneficial weather for Midwest crops opened the door for a divergence in old/new crop price outlooks.

 

Otherwise, activity was light, with traders continuing to take a cautious approach as the market remains subject to big price swings on shifts in weather patterns and world economic outlooks.

 

The Cropcast Weather Service forecast calls for widespread showers across the U.S. Delta, as well as western and southeastern Midwest this week, which will result in some additional improvements in moisture and crop conditions. Persistent abundant rains in the northern Delta and southwestern portions of the Midwest through the next 10 days may result in the development of some wetness.

 

Temperatures are expected to remain rather cool across much of the region through the next 10 days, which will prevent heat stress on the crops. However, the continued cool pattern will maintain slower than normal growth of the crops, Cropcast said in a morning forecast.

 

The U.S. Department of Agriculture will release its weekly crop-progress report at 4 p.m. EDT Monday. Analysts anticipate the percentage of soy crops rated in good to excellent to remain unchanged from the previous week.

 

 

Soy Products

 

Soy-product futures ended lower across the board, stumbling in unison with declines in soys. Light activity was featured throughout the day, as the market struggled in the absence of fresh fundamental news.

 

However, meal/oil spreading was a feature, as tight old-crop soymeal supplies and contrast to abundant soyoil inventories provided opportunities for adjustments in the meal/oil spread relationship, said Allendale's John Kleist.

 

December oil share was 38.23%, while the November/December soy crush ended at 78 1/2 cents.