September 29, 2009

 

CBOT Soy Review on Monday: Lower on seasonal pressure in light trade

 

 

Chicago Board of Trade soy futures stumbled Monday, retreating in quiet trade on seasonal pressure ahead of the fall harvest.

 

CBOT November soy finished 6 1/2 cents lower at US$9.19 1/2 per bushel.

 

December soymeal ended US$0.60 higher at US$284.50. December soyoil finished 81 points lower at 33.63 cents per pound. In pit trades, speculative fund selling was estimated at 3,000 lots in soy and 2,000 lots in soyoil.

 

Anecdotal yield estimates from early harvests are pretty good in the western Midwest, and with the major growing areas of the Midwest expected to escape a frost this week, buyers remained on the defensive, said Bill Nelson, analyst with Doane Advisory Service.

 

Traders are treading on the short side of the market as the harvest starts to ramp up, and without any definitive push from outside markets, upside movement was held in check.

 

Traders have dialed in some large production forecasts, and with chances of damage from a frost or freeze seen as minimal once crops make it through this week, traders are finding it tough to get bullish on prices, analysts said.

 

However, the market remains in a consolidative range, trend sideways, with a bearish bias on technical charts. Solid underlying export demand and tight availability of near-term supplies are bullish traits that limit downside risks.

 

Otherwise, activity was light, with many participants away from the market for the Yom Kippur holy day, while others took a cautious approach in front of Wednesday's crop reports.

 

The U.S. Department of Agriculture is scheduled to release its quarterly grain stocks report Wednesday 8:30 a.m. EDT (1230 GMT). The average of analysts' estimates surveyed by Dow Jones calls for fourth-quarter soy usage around 486 million bushels, bringing stocks down to 111 million bushels. Estimates ranged from 90 million to 135 million. USDA's September ending stock projection was 110 million bushels.

 

The T-storm Weather forecast said that after cool weather with some frost in northern areas Tuesday and Wednesday mornings, a round of unhelpful rain affects most corn and soy in the Midwest, with the heaviest in the western half of the corn belt.

 

A period of unseasonably cool and cloudy weather follows this weekend and ends early next week. Another storm system is probable to affect parts of the central U.S. next week, and the storm system may cause drying/maturation rates to remain sluggish, T-storm Weather said in the forecast.

 

In demand news, USDA announced Monday private export sales of 225,000 metric tonnes of soy for delivery to China in the 2009-10 marketing year.

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil losing product share on adjustments in the meal/oil spread relationship. Soyoil was pressured by bearish overnight price action in world vegoil markets, analysts said.

 

Soymeal ended narrowly mixed, with losses limited by spreads and underlying demand.

 

In demand news, private exporters reported to the U.S. Department of Agriculture export sales of 27,000 metric tonnes of soyoil for delivery to unknown destinations during the 2009-10 marketing year.

 

December oil share was 37.18%, while the November/December soy crush ended at 76 1/4 cents.