August 1, 2008

 

CBOT Soy Review on Thursday: Mixed; juggling weather; month-end evening

 

 

Chicago Board of Trade soybean futures ended mixed Thursday, chopping back and forth on Midwest weather and end-of-the-month positioning, analysts said.

 

August soybeans settled 1 3/4 cents higher at US$13.95 3/4 and November soybeans ended 1 cent lower at US$14.04.

 

December soymeal settled US$0.70 lower at US$375.50 per short tonne. December soyoil finished 2 points higher at 59.50 cents per pound.

 

The market struggled to sustain price direction over the course of the day, with stressful hot, dry forecasts for the U.S. Midwest through the weekend providing support, while outlooks for widespread appreciable rain next week applied pressure, said Tim Hannagan, analyst with Alaron Trading.

 

The juggling of the forecasts attracted speculative buying on price dips, and profit-taking on rallies, he added.

 

The market remained range bound, but with traders not convinced about next week's weather, volatile price action remained in place. The weather forecast can change quickly, so traders remain hesitant to take aggressive positions, particularly with the forecast expected to make a dramatic change from the weekend to midweek, analysts added.

 

Meanwhile, constant pressure from the energy sector weighed on futures, while the ability of the market to hold chart support and news of Argentina looking to play around with its export tax again generated support as well, said John Kleist, broker/analyst with Allendale Inc.

 

Otherwise, end-of-the-month position evening was featured, with prices holding near its recent sideways trading range, as traders await the August crop report and next weeks' weather for a clue on acreage and crop potential.

 

The 2009 contracts remained firm, however, continuing to feed off the fact that additional CRP acres will not be available.

 

The DTN Meteorlogix weather forecast said no persistent hot or dry weather is indicated during the next five days for the U.S. Midwest. A brief period of temperatures reaching the middle 90s Fahrenheit is possible over the weekend or early next week before scattered showers and thunderstorms and cooler temperatures return.

 

In the next week, the Delta will experience above-normal to much above-normal temperatures, with below-normal rainfall continuing to stress developing soybeans, Meteorlogix added.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended in mixed fashion, moving in unison with the two-sided theme in soybeans. Soyoil futures ended narrowly mixed, managing to shake off spillover weakness from crude oil, influenced by soybeans and support usage for biodiesel reported in the Census stocks report, analysts said.

 

Soymeal futures followed the lead of soybeans, losing some product share to soyoil on spreads.

 

December oil share ended at 44.21% and the November/December crush ended at 76 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses. Speculative buying was estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.