September 11, 2008

 

CBOT Soy Review on Wednesday: Stumbles; outside markets, weather influence

 

 

A stronger U.S. dollar coupled with weakness in crude oil and precious metals uncorked speculative selling Wednesday to plant Chicago Board of Trade soybean futures in negative territory.

 

September soybeans settled 27 1/2 cents lower at US$11.81 1/2 and November soybeans ended 23 cents lower at US$11.76 1/2.

 

December soymeal settled US$8.20 lower at US$325.80 per short tonne. December soyoil finished 49 points lower at 48.32 cents per pound.

 

A quiet news front coupled with frost threats abating kept traders' focus on outside-market influences, analysts said. Speculative selling easily pulled futures lower in thin volume, with a retreat in crude oil prices and perceptions a stronger U.S. dollar will suppress export demand keeping buyers sidelined, said Joe Victor, analyst with Allendale Inc.

 

Near-term weather conditions remain favorable for late-developing Midwest crops, and with private forecasts reducing the risk of a freeze dipping into the Midwest late next week, market bulls had little to hang their hats on, a CBOT floor broker said.

 

Nevertheless, active contracts traded inside days on technical charts, unable to challenge Tuesday's lows amid lingering uncertainty surrounding 2008 U.S. production in an already tight stock scenario, he added.

 

On tap for Thursday, the U.S. Department of Agriculture at 8:30 a.m. EDT will issue its weekly export-sales report. Soybean sales are estimated at 200,000 to 400,000 tonnes. Soymeal sales are projected in a range of 65,000 to 130,000 metric tonnes, with soyoil sales expected in a zero to 15,000-tonne range.

 

USDA is scheduled to release its August crop report Friday 8:30 a.m. EDT (1230 GMT). The average of analysts estimates projects a crop size of 2.950 billion bushels with a yield of 40.2 bushels per acre. The averages ranged from 2.818 billion to 3.035 billion bushels for production and 38.4 to 41.4 bushels per acre for yields. The USDA in August pegged the crop at 2.973 billion bushels using a yield of 40.5 bushels an acre.

 

The DTN Meteorlogix forecast expects the Midwest to be freeze-free for the next 10 days. The central band of the Midwest is currently a couple degrees below normal, with normal temperatures to the north and above-normal temps north of the border.

 

The western Midwest will be near to above normal Saturday, and then temperatures will drop a little to be near to below normal Sunday, Meteorlogix said. The eastern Midwest will be near to above normal for the weekend and drop below normal Monday, Meteorlogix added.

 

In pit trades, speculative fund selling is estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures stumbled in unison with soybeans, pressured by speculative selling in thin volume. Soyoil was influenced by weakness in crude oil and world vegoil markets. Soymeal followed the lead of soybeans, with declines accelerating on technical weakness.

 

December oil share ended at 42.58% and the November/December crush ended at 70 1/4 cents.

 

Speculative fund selling was estimated at 1,000 lots in soymeal, and 1,000 lots in soyoil.