August 25, 2006
CBOT Soy Review on Thursday: Down on beneficial weather, crop tour news
Bucking the trend of strength in neighboring corn and wheat, soy complex futures at the Chicago Board of Trade slid Thursday, pressured by bearish fundamentals as weather is favorable for developing crops and a tour of Midwestern fields suggest good pod counts.
Most-active November soybeans settled 1 1/2 cents weaker at US$5.65 a bushel. December soyoil settled down 50 points at 25.59 cents a pound. December soymeal rose US$2.20 to US$164.80 a short tonne.
After a firmer start, soybeans slid, as the market wasn't able to garner follow-through buying to keep those early gains. Pressure stemmed from lower-than-expected weekly export sales, favorable crop reports from the John Deere/Pro Farmer Midwest crop tour and helpful weather conditions.
"For the bean crop, this weather is absolutely ideal," said a long-time broker.
Midwest temperatures are generally benign and recent rainfall helps with pod-filling and could lead to heavy test weights during harvest.
Crop scouts on the John Deere/Pro Farmer Midwest crop tour said soybean pod counts seen across USDA crop district 5 of Iowa early Thursday were placed at 1,087 pods per square yard, down 6.7% from 2005 levels. The USDA currently projects a 15% decline in statewide Iowa soybean yields this season averaging 45 bushels/acre. The crop tour does not formulate a formal soybean yield projection.
Another group of scouts moved north and east from Worthingtonne, Minn., and found "healthy" soybean fields. Soybean pod counts in a 3-foot-by-3-foot area in Cottonnewood County ranged from 552.5 at the lowest to the high of 1,389.
The annual industry crop tour will compile final projections for Iowa and Minnesota prior to coming to a close Thursday evening in Owatonnena, Minn.
Light pressure came from the U.S. Department of Agriculture, which said weekly old-crop soybean export sales were 47,200 metric tonnes, a marketing-year low. New-crop sales were 336,300 MT tonnes.
The Census Bureau put the July crush at 148.5 million bushels, about where a survey of analysts estimated the crush, at 148.9 million bushels.
Buyers include Fimat buying 600 November; Goldenberg buying 400 November; Prudential buying 200 November; Rand buying 300 November; UBS buying 500 November. Sellers include ADM and Tenco each selling 200 November; Citigroup and Man Financial each selling 300 November.
Prudential spread 2,000 September-January; Tenco spread 1,000 November-September. Term bought 800 September US$5.60 puts.
Soy products
Soy products ended firmer, with soymeal gaining over soyoil.
Funds were buyers in soymeal and sellers in soyoil.
Soyoil futures were lower much of the session, pressured by speculative selling. Pressure for soyoil also came from the Census Bureau, which put the July soyoil stocks at 3.121 billion pounds, larger-than-expected. This rekindled ideas that biodiesel has not put a drain soyoil supplies as of yet, analysts said.
Soyoil's losses were soymeal futures gains as the market was moderately higher, feeding off soyoil/soymeal spread unwinding, solid export demand and technical support. While soymeal stocks in the Census report were bigger than expected, at 372,593 short tonnes, the spread-unwinding helped to limit meal losses.
Export sales were mildly supportive. USDA put soymeal sales at 69,800 tonnes for old-crop and new-crop sales were 130,200 tonnes. Soyoil sales were 22,100 tonnes for old-crop, while new-crops sales were 1,000 tonnes.
Buyers for soymeal include Fimat buying 700 December and 300 September; Man Financial buying 400 December. Sellers were scattered.
Calyon was seen buying 400 December soymeal and selling 800 December soyoil in a spread.
Soyoil buyers were Bunge buying 400 September and 200 December; ABN Amro buying 400 December; Fimat buying 300 September; Iowa Grain buying 200 October; J.P. Morgan and Prudential each buying 200 December. Fimat sold 200 December; Man Financial selling 500 December; RJ O'Brien selling 600 December; Rosenthal selling 300 December.
