July 30, 2009

 

CBOT Soy Review on Wednesday: Mostly down; outside markets, crop weather

 

 

Chicago Board of Trade soy futures ended mostly lower Wednesday, with deferred month contracts stumbling on outside market pressure and favorable weather for developing crops.

 

CBOT August soys ended 2 cents higher at US$10.56 1/2, and November soys finished 11 cents lower at US$9.16. In pit trades, speculative fund selling was estimated at 3,000 lots in soys and 2,000 lots in soyoil.

 

December soymeal ended US$1.30 lower at US$282.00. December soyoil finished 75 points lower at 33.78 cents per pound.

 

Strength in the U.S. dollar promoted selling pressure throughout the soy complex, with sharp declines in crude oil futures and the absence of crop threats keeping buyers on the defensive, a cash connected CBOT floor broker said.

 

However, bull spreads managed to strengthen over the course of the day, with bullish old crop supply and demand fundamentals buoying nearby contracts.

 

The market remains trapped within a sideways trading range, with tight old crop inventories, strong price premiums in South America and a big appetite from China for U.S. soy supplies keeping the nearby contracts underpinned, analysts said.

 

Otherwise, futures had few features to generate activity aside from outside markets, leaving spreading activity as a key influence on price action.

 

The DTN Meteorlogix Weather forecast calls for continued very cool temperatures over the central U.S. during the next five days, and possibly longer. Daytime temperatures will be as much as 15 degrees Fahrenheit below normal in the northwestern Midwest through the central Plains. Showers are in the picture as well, although coverage with these showers will be variable, Meteorlogix said.

 

On tap for Thursday, the U.S. Department of Agriculture weekly export sales report is scheduled to be released at 8:30 a.m. EDT, and analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended July 23 in a range of 400,000 to 650,000 metric tonnes. Soymeal export sales are seen between 55,000 and 130,000 tonnes, while soyoil sales are pegged between 20,000 and 100,000 tonnes.

 

 

Soy Products

 

Soy product futures ended mixed, with nearby soymeal rising at the expense of deferred months on bull spreading. Tight old crop supply concerns, strong demand and spillover strength from soys buoyed the front end of the soymeal market.

 

Soyoil futures stumbled, succumbing to pressure from meal/oil spread adjustments and speculative selling attributed to borrowed weakness from sharp declines in crude oil futures.

 

December oil share was 37.5%, while the November/December soy crush ended at 74 3/4 cents.