September 18, 2009

 

CBOT Soy Review:Mixed on Thursday; Nearbys bounce on late short covering

 

 

Soy futures at the Chicago Board of Trade ended mixed in choppy two-sided trade Thursday, with nearby contracts edging higher on late short-covering.

 

CBOT November soy finished 2 1/2 cents higher at US$9.53 per bushel. In pit trades, speculative fund buying was estimated at 2,000 lots in soy, and 1,000 lots in soyoil.

 

December soymeal ended US$0.70 lower at US$293.30. December soyoil finished 18 points higher at 34.96 cents per pound.

 

Nearby futures managed to bounce from early losses, finding support from lingering uncertainty surrounding 2009 crop production and solid export demand, analysts said.

 

With question marks still facing the size of the U.S. crop, and without any global competition for cheap, available soy export supplies until South America comes on line next spring, downside pressure was tempered, a CBOT floor analyst said.

 

However, prospects for record crop production and the absence of a frost or freeze threat to immature soy plants enticed traders into reducing weather premium in the market for most of the day. This was consistent, until a lack of follow-through selling, and the ability of the November contract to hold above chart support, enticed sellers into covering some short positions down the stretch, analysts said.

 

Solid demand from China remains a supportive feature for prices, as, with U.S. Midwest crops needing to avoid a frost before early October to achieve potential, the market will maintain some risk premium in prices, a CBOT floor analyst said.

 

The U.S. Department of Agriculture announced Thursday that private exporters reported the sale of 121,000 metric tonnes of soy for delivery to China in the 2009-10 marketing year.

 

The DTN Meteorlogix weather forecast for the Midwest features warm weather continuing, with temperatures as much as 10 degrees above normal in some places.

 

While cooler temperatures are still expected next week, the U.S. and European jet-stream models now predict less chance of a frost. The threat of significantly cold temperatures has diminished.

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil gaining product share on adjustments in the meal/oil spread relationship. Improving availability of soy supplies as U.S. harvesting picks up pace, and talk of higher protein content in beans this year due to cool summer conditions weighed on soymeal.

 

December oil share was 37.28%, while the November/December soy crush ended at 76 3/4 cents.