September 4, 2009

 

CBOT Soy Review on Thursday: Falls on technicals, large crop outlook

 

 

Chicago Board of Trade soy futures slumped Thursday on technical selling and expectations for a big U.S. crop, with traders expected to keep a close eye on weather ahead of the holiday weekend.

 

September soy sank 27 1/4 cents to US$9.82 a bushel, and November soy fell 9 1/2 cents to US$9.41 1/2. September soymeal tumbled US$26.10 to US$322.40 per short tonne, and December soymeal lost US$5.80 to US$286.70. September soyoil slipped four points, to 34.08 cents per pound, and December soyoil dropped five points, to 34.65.

 

November soy felt technical pressure after dipping below the area around US$9.45 to US$9.40 a bushel, a trader said. The contract closed near its 200-day moving average around US$9.41.

 

Private analytical firm Informa Economics estimated a final soy yield of 44.1 bushels per acre and a crop of 3.372 billion bushels, above the U.S. Department of Agriculture's latest estimates, according to traders. The projections were not surprising but confirmed expectations for a large crop, said Brian Hoops, president of Midwest Market Solutions.

 

Traders will monitor weather forecasts heading into the Labor Day weekend as development remains behind normal. One weather model around midday talked about the potential of a frost Sept. 15-18, which inspired some short-covering, Hoops said.

 

If forecasts Friday confirm that model, the market could see more short-covering amid concern about potential crop losses, Hoops said. If forecasts look favorable heading into the long weekend, prices Friday could test Thursday's lows, he said.

 

T-Storm Weather said it was sticking by its forecast that "lacks a damaging frost/freeze threat." A forecast for coldness in two weeks is "viewed as incorrect because it is too many days into the future for any useful insight," the private weather firm said.

 

Commodity funds sold an estimated 4,000 contracts.

 

 

Soy products

 

Soy product futures closed lower along with soy, with nearby soymeal leading the complex lower, floor traders said. September soymeal, which is in delivery, "collapsed" as traders unwound spreads, a floor trader said. Commodity funds sold an estimated 1,000 soymeal contracts and were seen as even in soyoil, they said.