October 8, 2009

 

CBOT Soy Review on Wednesday: Soy up in choppy, consolidative action

 

 

Soy futures on the Chicago Board of Trade ended a choppy, two-sided session, posting modest gains Wednesday after receiving a late push from speculative buying.

 

CBOT November soy finished 2 cents higher at US$9.12 per bushel.

 

December soymeal ended US$3.50 higher at US$281.00 per short tonne. December soyoil finished 22 points lower at 34.04 cents per pound. In pit trades, speculative funds were estimated buyers of 3,000 lots in soy, while estimated sellers of 1,000 lots in soyoil.

 

A lack of fresh fundamental news promoted consolidative action throughout the day, with the market seemingly taking a breather from recent activity in preparation for Friday's crop reports, said Joe Victor, analyst with Allendale Inc.

 

Outlooks for record 2009 production remained an anchor on prices, while tight availability of nearby supplies due to harvest delays and frost worries generated support to offset the defensive pressure.

 

The threat of freezing temperatures in the Midwest is having a smaller impact on prices amid trader ideas cold temperatures will only cause minimal damage to soy crops that were reported 79% mature as of Sunday.

 

However, wet, soggy fields will stall harvest activity, limiting the movement of new crop supplies into the tight cash pipeline. These offsetting forces kept many traders on the sidelines, awaiting the release of government production estimates Friday, a CBOT floor broker said.

 

Conditions in the central U.S. are "very cold for this time of year," said DTN Ag Weather Meteorologist Joel Burgio. The central and northern plains and western Midwest are trending 15 or more degrees below normal.

 

By the end of this week, the northern tier of the Midwest will see temperatures in the teens and 20s Fahrenheit. It will get cold enough in some areas for long enough that soggy fields will be solid enough to work in. That usually takes a couple days of temperatures in the low to mid 20s, Meteorlogix said.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended Sept. 24 to be in a range of 650,000 to 950,000 metric tonnes. Soymeal export sales are seen between 50,000 and 240,000 tonnes, while soyoil sales are pegged between 20,000 and 1,120,000 tonnes.

 

USDA is scheduled to release its crop production and supply and demand reports Friday at 8:30 a.m. EDT. The average of analysts' estimates projects a crop size of 3.291 billion bushels with a yield of 42.9 bushels per acre. The averages ranged from 3.217 to 3.383 billion bushels for production and 41.9 to 44.0 for yields. In September, USDA projected a crop size of 3.245 billion bushels using a yield of 42.3 bushels an acre.

 

 

Soy Products

 

Soy product futures ended mixed, with meal continuing to gain product share on corrections in the meal/oil spread relationship.

 

Soyoil futures stumbled again, retreating on the bearish influence of crude oil futures and the weight of ample nearby domestic supplies, traders said.

 

December oil share was 37.64%, while the November/December soy crush ended at 80 3/4 cents.