August 25, 2007

 

CBOT Soy Review on Friday: Settle higher; weather issues underpin

 

 

Chicago Board of Trade soybean futures ended higher Friday, buoyed with crop uncertainties associated with weather issues in the northern Midwest and southern soybean belt.

 

September soybeans settled 7 cents higher at US$8.49, and November soybeans finished 6 3/4 cents higher at US$8.65. September soymeal settled US$1.40 higher at US$233.70 per short tonne, and December soymeal settled US$1.10 higher at US$240.70. September soyoil ended 63 points higher at 35.92 cents a pound, and December soyoil finished 69 points higher at 36.67.

 

Flood concerns in the upper Midwest and heat stress in southern locations remained dominant features to keep prices underpinned, analysts said.

 

However, despite the gains, futures traded more in a consolidative fashion, with prices hovering within Thursday's trading ranges, analysts added. The most active November future was bordered by its 50-day moving average on the top and its 20-day moving average beneath it.

 

Traders took the opportunity to square up a few positions, with ideas recent price movements had factored in the weather, leaving prices trading in a featureless sideways pattern, a trader added. Otherwise, futures gathered momentum from an upward push in soyoil market, a CBOT broker said.

 

The DTN Meteorlogix weather forecast calls for additional heavy storms heading into the weekend with some flooding in the northern half of the Midwest - mostly in northern Missouri, southern and eastern Iowa and northern through central Illinois. The impact of this moisture will be variable. Some areas will benefit - notably southeastern Iowa, northeast Missouri and central Illinois. However, rains in northern Illinois offer the potential for flooding to develop, which could damage late-season soybeans.

 

Hot, dry weather continues to stress late-filling soybeans in the Delta, and threatens to reduce soybean yields in the southern Midwest - especially southern Illinois and Indiana, western Kentucky, and southeastern Missouri. Temperatures during the weekend will again range from the mid-90s to 102 Fahrenheit from the Ohio Valley south through the Delta, Meteorlogix forecasts.

 

The 10-day forecast through Labor Day, Monday, Sept. 3, brings in cooler weather to much of the central U.S. - including the hottest areas of the Ohio Valley and the Delta. However, early indications suggest that this cooler weather will come without significant rainfall. This lack of moisture relief is a disappointing feature to areas that have been stressed by the heat wave and drought conditions of the month of August, Meteorlogix reports.

 

Professional Farmers of America on Friday estimated the 2007-08 U.S. soybean crop at 2.658 billion bushels. The organization, known as Pro Farmer, sees the soy yield at 42.0 bushels per acre. This compares to the U.S. Department of Agriculture's projection of a 2007-08 soybean crop at 2.625 billion bushels, with an average yield of 41.5 bushels/acre.

 

In pit trades, MF Global bought 400 November, and Penson GHCO and Rand Financial each bought 300 November. Tenco and UBS Securities each sold 400 November, ADM Investor Services and Term Commodities each sold 300 November. Speculative funds were estimated buyers of 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Friday, with soyoil the upside leader. Soyoil futures ended the session posting strong gains, buoyed by spillover support from higher crude oil prices and a mild correction in the meal/oil spread, analysts said. Technical buying was featured also, with advances accelerating as prices bolted through resistance at the December contract's 10-day and 100-day moving average, analysts added.

 

Soymeal futures ended mostly higher, staging a late short-covering bounce from earlier lows. However, oil/meal spreading kept the market on the defensive for most of the day, with prices more in a consolidation mode following recent price gains, analysts said.

 

December oil share ended at 43.24% and the September crush ended at 60 1/4 cents.

 

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

 

In soyoil trades, buyers and sellers were scattered among various commission houses. Speculative fund buying was estimated at 1,000 lots and commercial selling was estimated at 1,000 lots.