August 13, 2009

 

CBOT Soy Review on Wednesday: Mixed; new-crop bounce on bullish outlooks

 

 

Soy futures on the Chicago Board of Trade ended mixed Wednesday, with new-crop futures rebounding from early losses on bullish long-term philosophies.

 

CBOT August soys ended 1/2 cent lower at US$12.16, September settled 5 cents lower at US$10.92 1/2, and November soys finished 5 1/2 cents higher at US$10.44. In pit trades, speculative fund buying was estimated at 4,000 lots in soys and 2,000 lots in soyoil. Speculative fund selling was estimated at 1,000 lots in soymeal.

 

December soymeal ended US$1.20 lower at US$312.50. December soyoil finished 45 points higher at 39.22 cents per pound.

 

The market experienced choppy, range-bound activity, with mixed opinions about U.S. Department of Agriculture crop and demand estimates keeping the market struggling to challenge near-term highs and lows.

 

Prices were supported by reductions in USDA new-crop yield, production and carryout projections, but the declines were not a surprise and tempered the bullish effect on prices, analysts said.

 

Market bulls were consoled by the lower yield, but with weather favorable for development and future demand uncertain, buyers remained cautious of aggressively testing upside moves, said Gavin Maguire, research director at e-hedger.

 

Nevertheless, tight old-crop carryover, the need for an extended growing season to maximize yield potential and continued Chinese buying remain bullish attributes to keep prices from breaking through the lower end of the market recent trading band.

 

The U.S. Department of Agriculture projected 2009 U.S. soy production at 3.199 billion bushels with a yield of 41.7 bushels per acre. Soy production is forecast at a record, up 8% from last year. Based on Aug. 1 conditions, yields are up 2.1 bushels from 2008. If realized, this will tie for the fourth-highest yield on record, according to USDA.

 

USDA also announced private export sales of 113,000 metric tonnes of soys for delivery to China in the 2009-10 marketing year. Of that total, the USDA said, 58,000 tonnes "had previously been reported as sales to unknown destinations."

 

 

Soy Products

 

Soy product futures ended mixed, with adjustments in the oil/meal spread featured. Soyoil futures climbed, grabbing product share on spreads, amid spillover support from crude oil futures and bullish demand outlooks for world vegoil markets, analysts said.

 

Soymeal futures ended lower, but tight availability of supplies remained supportive features to limit downside risks, analysts said.

 

December oil share was 38.56%, while the November/December soy crush ended at 75 cents.