August 10, 2007
CBOT Soy Review on Thursday: End mixed, awaiting USDA crop reports
Chicago Board of Trade soybean futures ended mixed Thursday, with prices chopping around as traders made final preparations for Friday's crop production and supply/demand reports.
August soybeans settled 3 cents higher at US$8.58, and November soybeans finished 1/4-cent lower at US$8.77 3/4. August soymeal settled US$2.00 higher at US$232.30 per short tonne. August soyoil ended 34 points lower at 36.88 cents a pound.
Two-sided trade was the theme of the day, as the market garnered pressure from corn and soyoil while support from soymeal and concerns for crops in the southern Midwest underpinned prices, said Jack Scoville, analyst with Price Futures Group in Chicago.
Soybeans followed corn lower for most of the day, with the influence of weaker outside markets aiding the lower tonnee, analysts say. However, with lingering worries over crops in the southern Midwest and Delta and an uncertain production position as crops move through their pod filling stage enabled futures to keep premium in the market, said Brian Hoops of Midwest Market Solutions.
Nevertheless, futures failed to generate any significant momentum in either direction, keeping prices hovering in a range, as traders look ahead to Friday's crop reports, analysts added.
The U.S. Department of Agriculture is scheduled to release its August crop production and supply and demand reports Friday at 8:30 a.m. EDT. The average of analysts' estimates pegged 2007 soybean production at 2.653 billion bushels, up from the July figure of 2.625 billion. The average was from a range of 2.550 billion to 2.722 billion bushels. Ending stocks were pegged at 589 million bushels from a range of 575 million to 603 million.
The DTN Meteorlogix Weather forecast calls for more stressful hot and dry weather in the central and southern Midwest through the Delta during the next five days.
Temperatures will remain in the 90 to 100 degrees Fahrenheit range across much of the region, notably in the Ohio Valley and South. Showers in the next few days will continue to target the western and northern Midwest areas.
Concern is being expressed, however, that rain patterns have been spotty during the past week. In addition, temperatures will be in the 90s Fahrenheit, bringing in the prospect of heat stress to developing crops even with the recent rains.
During the six-to-ten-day period ending Aug. 19, upper-atmosphere high pressure is still on track to locate over the lower Mississippi Valley, and extend eastward to the mid-Atlantic region and the Southeast U.S. Conditions will remain hot and dry for crops in the central and southern Midwest through the Delta and southwest Plains. Rainfall chances will continue to focus on the northern Midwest, Meteorlogix forecasts.
In pit trades, ADM Investor Services bought 600 November, scattered light buying from various commission houses. RJ O'Brien sold 700 November, Fimat and Fortis each sold 400 November, Penson GHCO, JP Morgan and Iowa Grain each sold 300 November. Speculative fund selling was estimated at 2,500 lots.
SOY PRODUCTS
Soy product futures ended mixed, with soymeal garnering product share at the expense of soyoil once again. Soymeal futures continue to draw support from commercial buying, with reports of crusher downtime adding support as well, said Price Futures Groups' Jack Scoville. Solid weekly export sales were seen aiding the upward tonnee also.
Soyoil futures ended lower, pressured by weakness in crude oil as well as short term negative chart patterns, Scoville said.
August oil share ended at 44.25% and the August crush ended at 58 3/4 cents.
In soymeal trades, buyers and sellers were scattered among various commission houses, with commercials and speculative funds net buyers on the day.
In soyoil trades, JP Morgan bought 300 September, Tenco and Fimat each bought 300 December, with sellers scattered among various commission houses. Speculative funds were estimated sellers of 2,000 lots.
