September 22, 2009

 

CBOT Soy Review on Monday: Tumble; frost free weather, outside markets

 

 

Soy futures on the Chicago Board of Trade stumbled Monday, continuing to extract risk premium from prices on frost free weather outlooks and bearish outside market influences.

 

CBOT November soy finished 27 1/2 cents lower at US$9.13 1/2 per bushel. In pit trades, speculative fund selling was estimated at 4,000 lots in soy, 1,000 lots in soymeal and 2,000 lots in soyoil.

 

December soymeal ended US$8.60 lower at US$276.20. December soyoil finished 91 points lower at 34.19 cents per pound.

 

The market has officially taken the prior week's weather premium out of the market, as the absence of a frost threat to late maturing Midwest crops improve the chances of record production potential, said John Kleist, broker/analyst with Allendale Inc.

 

Broad-based commodity weakness kept pressure on prices as well, with a firmer U.S. dollar and tumbling crude oil prices sending buyers to the sidelines, analysts said.

 

The outside markets kept pressure on prices, but weather remains a key factor, and without any threat to the crop, buyers had little encouragement to aggressively enter the market. A lower-than-expected weekly export inspection figure was another bearish feature weighing on prices.

 

However, despite the losses, sellers took a cautionary approach as prices neared last Tuesday's lows, Kleist said. Harvest delays in the U.S. Delta and the lingering risk of a yield damaging frost occurring before soy crops finish developing provided support, he added.

 

The DTN Meteorlogix weather forecast for the Midwest calls for crops in the region to continue to benefit from near- to above-normal temperatures for at least the next week and probably longer. There is no frost in the forecast through early October as cooler weather appears confined to northern Ontario, Canada.

 

In the Delta, very wet weather last week and periods of wet weather during the next week is unfavorable to maturing and harvesting soy.

 

U.S. Department of Agriculture announced Monday, 250,000 bushels of soy were inspected for export in the week ended Sept 17. The figure was well below analyst estimates of 10 million to 20 million bushels.

 

USDA will release its weekly crop progress report at 4 p.m. EDT, with crop ratings expected to be unchanged from the prior week's 68% good to excellent.

 

 

Soy Products

 

Soy product futures prices fell in unison with soy, succumbing to the selling pressure associated with bearish outside influences and the potential availability of record 2009 soy production.

 

In demand news, USDA on Monday announced private export sales of 98,000 metric tonnes of soyoil for delivery to unknown destinations for the 2009-10 marketing year.

 

December oil share was 38.24%, while the November/December soy crush ended at 70 1/4 cents.