October 9, 2007

 

CBOT Soy Review on Monday: Falls on stronger US dollar, harvest

 

 

Chicago Board of Trade soybean futures tumbled Monday under pressure from a stronger U.S. dollar and the advancing U.S. harvest, analysts said.

 

November soybeans fell 15 cents to US$9.25 1/2 per bushel, and January soybeans dropped 18 cents to US$9.42. December soymeal ended down US$4.90 at US$260.50 per short tonne, and December soyoil finished down 55 points at 38.48 cents per pound.

 

The soybean market slumped in response to strength in the greenback because a stronger U.S. dollar makes U.S. commodities less attractive to foreign buyers, analysts said.

 

Seasonal patterns and the advancing U.S. soybean harvest contributed to the weaker tonnee as the crop continues to come on line, said Anne Frick, senior oilseed analyst for Prudential Financial. There are ideas that the harvest will be more than 50% complete when the U.S. Department of Agriculture issues its weekly crop progress report Tuesday, she said.

 

The USDA said on Oct. 1 that 29% of the crop was harvested at of Sept. 30. The release of the progress report and weekly export inspections figures were delayed a day this week because of the Columbus Day holiday.

 

This week should give producers a window to make more significant progress on the harvest, said Don Roose, president of U.S. Commodities. Yield reports continue to get bigger as the harvest moves north, he said.

 

Steep losses in U.S. wheat futures were another bearish influence on the soybean market, Roose said. Wheat futures ended limit down, or 30 cents lower, at all three U.S. exchanges on profit-taking and a setback from lofty prices.

 

"The wheat market is influencing all the grains," Roose said. "We went up with wheat, we went down with wheat."

 

Technical selling also pressured CBOT soybeans as the November contract took out last week's low of US$9.34 1/2, a floor trader said. There was some follow-through liquidation after November was unable to settle above US$9.56 1/2 last week, an analyst said.

 

Commodity funds sold an estimated 4,500 contracts. In pit trades, Fimat bought 600 July and sold 200 November, while RJ O'Brien bought 500 July and sold 200 November.

 

In other news, rain in northern Brazil eased some dryness concerns, an analyst said. Brazilian soybean areas in the north got some scattered showers but not enough to proceed with planting, DTN Meteorlogix said.

 

"Hot and dry conditions are expected to last through this week," Meteorlogix said. "The southern areas are wet, but it is too early to plant there."

 

 

SOY PRODUCTS

 

CBOT soy product futures closed lower with soybeans. Technical selling and losses in the soybean market led the whole complex into negative territory, a floor trader said. Weakness in crude oil weighed on soyoil futures, the trader added. Declines in palm oil futures also helped set a weaker tonnee for the complex, an analyst said.

 

Commodity funds also sold an estimated 2,000 soymeal contracts and 2,000 soyoil contracts. In pit trades, Citigroup bought 600 December soyoil and sold 100 December soyoil.