September 17, 2009

 

CBOT Soy Review on Wednesday: Ends lower on reduced frost threat

 

 

Chicago Board of Trade soy futures ended weaker but well off session lows Wednesday, as forecasters reduced the threat of frost in the U.S. next week.

 

November soy settled down 9 1/2 cents at US$9.50 1/2 a bushel after hitting an open outcry session low of US$9.29. December soyoil closed down 4 points at 34.78 cents per pound, and December soymeal closed down US$4.30 to US$294 per short tonne.

 

Soy fell hard early in the trading session but trimmed losses ahead of the close. The market was due for a profit-taking pullback after rallying Tuesday on forecasts for a damaging frost in the Midwest next week, traders said.

 

Forecasts on Wednesday backed off considerably from Tuesday's outlook and temporarily eased worries about the threat to immature crops, meteorologists said. Still, the weather remains "iffy" for next week, a CBOT floor analyst said.

 

Sellers "hit the market early, and it came back," he said. "People are afraid to take stuff home overnight."

 

Indeed, it's difficult to accurately forecast weather that's a week away or more, according to meteorologists. The market is particularly sensitive to frost threats because crop development has been delayed by a late spring planting and generally cool summer.

 

Outside markets were seen as supportive but took a backseat to the weather, traders said. The U.S. dollar was weaker, while crude oil, gold and equities were higher.

 

November soy closed below the 20-day moving average around US$9.58 after closing just above it Tuesday. The contract is above the 10-day moving average, which sits around US$9.33.

 

Commodity funds sold an estimated 5,000 contracts.

 

 

Soy Products

 

CBOT soy product futures finished lower but off session lows as the markets followed soy, a trader said. Strength in crude oil helped underpin soyoil, he said.

 

Commodity funds sold an estimated 1,000 soyoil contracts and 1,000 soymeal contracts.