October 15, 2009

 

CBOT Soy Review on Wednesday: Mixed; dollar, harvest support soy

 

 

Soy futures on the Chicago Board of Trade ended higher Wednesday, but well off earlier highs, as profit-taking trimmed gains down the stretch.

 

CBOT November soy finished 1 cent higher at US$9.94 per bushel.

 

December soymeal ended 60 cents lower at US$305.70 per short tonne. December soyoil finished 12 points higher at 36.18 cents per pound. In pit trades, speculative funds were estimated buyers of 3,000 lots in soy, and 1,000 lots in soyoil.

 

Harvest delays across the heart of the crop belt causing supply tightness coupled with weakness in the U.S. dollar provided support to underpin futures.

 

The problems with the harvest provided fundamental strength while external factors related to the declining U.S. dollar opened the door for speculative money to flow back into commodities, said Mario Balletto, analyst with Citigroup in Chicago.

 

"Speculative funds are putting money into commodities, as the falling U.S. dollar generates a feeling there is an inflationary aspect growing," Balletto said.

 

However, advances were trimmed in late dealings as the easing of fund related buying encourage profit taking.

 

Reports of soy beginning to move into the cash pipeline in Iowa, reflected by a dip in cash basis there, took some edge off prices, said Jack Scoville, analyst with Price Futures Group.

 

Farmers see US$10 beans as a good price, and with some harvesting taking place in the Iowa region, producers are taking advantage, particularly with the possibility of some windows of opportunity for a pick up in harvesting next week, he added.

 

Meanwhile, solid underlying demand, tight supplies at U.S. export locations in the face of large export sales on the books kept a floor beneath prices. Looking ahead, the price trends will key on weather for harvesting next week, with movements in the U.S. dollar helping push prices in either direction.

 

T-Storm Weather said light rain and snow will sweep across most Midwest corn and soy areas through Thursday. Unseasonable coldness follows across the Corn Belt and Delta from Friday through Sunday, with killing frosts and freezes accompanying coldness in the eastern Corn Belt Sunday and Monday mornings.

 

Next week, a storm system moves from the Rockies into the central U.S. Rain results from this pattern with the main issue regarding coverage and amounts. The latest GFS weather model is drier than previously, but a number of unresolved issues exist and the point is that most corn and soy will receive at least 1 quarter of a inch of moisture from Tuesday through Friday, said T-Storm Weather.

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil gaining against meal in late action. Outside market factors, with weakness in the U.S. dollar buoying crude oil futures, and lower than expected soyoil stocks in the NOPA crush report supported soyoil futures, analysts said.

 

Soymeal futures were mixed, with active contracts drifting lower after a midday slide in soy eliminated the market's spillover support.

 

December oil share was 37.19%, while the November/December soy crush ended at 76 1/2 cents.