August 5, 2009

 

CBOT Soy Review on Tuesday: Ends mixed; old crop sags on profit-taking

 

 

Chicago Board of Trade soy futures finished mixed Tuesday as profit-taking pressured old-crop contracts and weather worries supported the new crop, analysts said.

 

September soys closed down 5 cents at US$10.83 1/2 a bushel, while November soys ended up 1 cent at US$10.31 1/2. December soyoil finished down 11 points at 38.17 cents a pound, and December soymeal ended up US$2.20 to US$311.80 a short tonne.

 

August and September soys fell in a setback from a rally Monday, said Tim Hannagan, analyst for Alaron. The losses looked like "typical profit-taking off yesterday's strength," he said.

 

New-crop November soys felt support from questions about the impact of hot, dry weather expected in the U.S., Hannagan said. Soys are made in August and are entering the critical pod-filling stage of development.

 

The U.S. Plains and western corn belt should see "near-sustained heat" in the mid-90s Fahrenheit starting next week and continuing through mid-August, T-Storm Weather said in an update to its daily forecast. The private weather firm warned it was "cautious regarding how heat will actually verify."

 

"The market is underpinned by the uncertainty as to how long this heat dome is going to settle in as we enter this key pod-setting stage," Hannagan said.

 

There also is uncertainty about how the U.S. Department of Agriculture will adjust its production and yield estimates in crop reports due out Aug. 12. Positioning should become a feature ahead of the release of the crop data, traders said.

 

Commodity brokerage firm FCStonnee on Monday said it estimated 2009 U.S. soy production at 3.247 billion, with an average yield of 42.4 bushels. The USDA in July estimated production at 3.26 billion, using an average yield of 42.6 bushels.

 

Commodity funds bought an estimated 1,000 contracts. There was some unwinding of bull spreads, a trader said.

 

 

Soy Products

 

CBOT soy product futures finished mixed, as soyoil fell in a profit-taking setback from Monday's gains, traders said. Commodity funds sold an estimated 1,000 soyoil contracts and were seen as even in soymeal.

 

Crude oil, which often influences the soy complex, did not provide much strong direction, traders said. Soy traders will keep an eye on outside markets Wednesday, as the Department of Energy is slated to release oil and product inventory data, Hannagan said.