September 30, 2009

 

CBOT Soy Review on Tuesday: Lower; big crop anchors market

 

 

Soy futures on the Chicago Board of Trade ended lower Tuesday, as the market struggles to find buying support ahead of an anticipated record 2009 soy harvest.

 

CBOT November soy finished 2 1/2 cents lower at US$9.17 per bushel.

 

December soymeal ended US$0.30 higher at US$284.80. December soyoil finished 22 points higher at 33.85 cents per pound. In pit trades, speculative fund selling was estimated at 2,000 lots in soy, and net buyers of 1,000 lots in soyoil.

 

A big crop and a lessening threat of yield losses due to a freeze in the Midwest served as the catalyst to keep a bearish slant on the soy market, said John Kleist, broker/analyst with Allendale Inc.

 

The minimal crop losses that would occur from a frost at this time aren't material enough to justify soy having a rally, said Kleist.

 

Soy price movement remains range bound, with record crop potential an anchor on prices, while strong demand and tight availability of cash supplies amid a slow new-crop harvest progress underpins prices.

 

Position evening ahead of Wednesday's quarterly grain stocks report coupled with corn/bean spreading held buyers at bay as well.

 

The market is stuck in a range, with chart resistance at the November contract's 10-day moving average capping upside movement, said Kleist. The penetration of the chart support in the US$9.06 to US$9.02 area basis the November contract will open the door for further downside movement, Kleist said.

 

Nevertheless, the market will find it tough to rally with a record crop set to enter the cash pipeline in a few weeks.

 

On tap for Wednesday, 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.

 

 

Soy Products

 

Soy-product futures ended a two-sided session mixed, with adjustments in the meal/oil spread relationship featured attractions. Soyoil futures managed to recover from early losses, gaining product share on the unwinding of some spreads, traders said.

 

Soymeal futures finished narrowly mixed on spread action but remained firmly underpinned by solid demand amid the limited availability of soy supplies for processors to crush, analysts said.

 

December oil share was 37.24%, while the November/December soy crush ended at 82 cents.