September 24, 2009

 

CBOT Soy Review on Wednesday: Retreats on less-threatening weather

 

 

Soy futures at the Chicago Board of Trade ended lower Wednesday, falling on less-threatening weather for Midwest crops.

 

CBOT November soy finished 1 1/2 cents lower at US$9.20 1/2 per bushel. In pit trades, speculative fund selling was estimated at 1,000 lots in soy, and 1,000 lots in soyoil.

 

December soymeal ended US$1.80 higher at US$280.50. December soyoil finished 36 points lower at 34.56 cents per pound.

 

The extraction of weather premium kept prices on the defensive for most of the day, as weather models failed to verify frost threats that were forecast Tuesday, said Tim Hannagan, analyst with P.F.G. Best.

 

Weakness in crude oil and gold futures provided outside weakness to aid the defensive tonnee, with seasonal pressure attributed to the fall harvest picking up momentum adding to the losses.

 

However, futures managed to bounce off its lows, finding support from short covering as the market remains concerned about potential changes in crop weather.

 

Weather remains the dominant trend reversing influence on the market, and that is enough to provide some underlying support, said Hannagan.

 

Meanwhile, harvest delays in the U.S. Delta and the uncertainty of the final U.S. crop size with yield losses still possible if the late-maturing crops are unable to finish development ahead of the first fall freeze, he added.

 

The DTN Meteorlogix weather forecast calls for continued mild temperatures in the Midwest. Crops in the Midwest will continue to benefit from near- to above-normal temperatures for at least the next five days. Cooler weather early next week bears watching, but the early indications suggest this will not be cold enough to cause problems for crops.

 

Several periods of rain with up to 2 inches total precipitation are in store for the heart of the Midwest during the next five days. Wet weather may cause delays to fall field work and early harvests in some locations, Meteorlogix added.

 

On tap for Thursday, U.S. Census Bureau is expected to estimate the August soy crush at 118.9 million bushels, down from last month on the tightness of available soy supplies, according to a survey of industry analysts. The Census Bureau's crush report is scheduled for release Thursday at 8 a.m. EDT (1200 GMT).

 

U.S. Department of Agriculture is scheduled to release its weekly export sales report Thursday at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended Sept. 17 to be in a range of 550,000 to 850,000 metric tonnes. Soymeal export sales are seen between 50,000 and 190,000 tonnes, while soyoil sales are pegged between 15,000 and 50,000 tonnes.

 

 

Soy Products

 

Soy product futures ended mixed, with adjustments in the meal/oil spread relationship featured. Soyoil was the weak link in the complex, succumbing to spillover pressure from crude oil futures. Soyoil is linked to energy prices amid its relationship with biodiesel fuel, analysts said.

 

Soymeal benefited from the selling of soyoil on spreads, as weakness from soy, served as an anchor for the market.

 

December oil share was 38.17%, while the November/December soy crush ended at 76 3/4 cents.