September 25, 2009

 

CBOT Soy Review on Thursday: Mixed; range-bound, await fresh directives

 

 

Soy futures on the Chicago Board of Trade ended mixed Thursday as the market continued in a trading range and traders awaited fresh fundamental directives.

 

CBOT November soy finished 1 cent lower at US$9.19 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 soyoil finished 9 points lower at 34.47 cents per pound.

 

The market continues to grind lower but fails to find enough selling interest.

 

December soymeal ended US$1.10 lower at US$279.40 short tonnes to challenge recent lows, as lingering uncertainty tied to the eventual crop size opened the door for some bottom-picking to emerge, analysts said.

 

Outlooks for a record large 2009 crop remains an anchor on prices, and with only mild frost threats on the horizon, buyers continue to take a cautious approach.

 

Downside pressure remains limited, with weakness in outside markets not enough to sink the market. Bullish underlying demand, tight near-term supplies amid harvest delays in the U.S. Delta and light concerns of potential yield losses if a frost does emerge in the next week provide a fair amount of uncertainty to underpin prices, analysts said.

 

T-storm Weather said after the rain ends in the central U.S. over the next few days, a drier pattern will unfold. Coolness will coincide with dryness for several days, which will lead to minimums in the 30s Fahrenheit on Tuesday morning across the northeast third of the Corn Belt. Killing frost most probably will remain north of key crop areas.

 

A helpfully drier and warmer pattern will occur for at least a few days later next week, which will lead to improved harvesting and maturation rates. Warmth is expected to occur in advance of a strong storm system. Once this storm system exits, a cooler pattern remains probable. Whether this leads to frost is highly debatable, and frost is far from imminent. There are too many uncertainties leading into next weekend to have confidence in weather that follows beyond Oct. 4, T-storm Weather said.

 

In demand news, U.S. Department of Agriculture reported total weekly soy export sales for the 2009-10 marketing year were a net 1.152 million metric tonnes for the week ended Sept. 17. The primary buyer was China, with 654,500 tonnes. Analysts had forecast sales between 550,000 and 850,000 metric tonnes.

 

 

Soy Product

 

Soy product futures ended lower, retreating on a lack of bullish fundamental incentives to attract buyers. Soyoil futures stumbled, with spillover weakness from sharp declines in crude oil and abundant supplies overshadowing supportive export demand, analysts said.

 

USDA said soyoil commitments were 106,200 metric tonnes for the week ended Sept 17. USDA also announced private exporters reported the sale of 20,000 metric tonnes of soy oil for delivery to unknown destinations during the 2009-10 marketing year.

 

Soymeal futures experienced a choppy, two-sided session in unison with movements in soy. The absence of fresh news to spark direction has traders taking a cautious approach to activity, with adjustments in the meal/oil spread relationships featured.

 

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