CBOT Soy Review on Monday: Backpedal; clearer weather forecast, dollar bounce

 

 

Chicago Board of Trade soybean futures stumbled Monday, with prices backpedaling on clear harvest opportunities for the Midwest next week and a higher U.S. dollar.

 

CBOT November soybeans finished 19 1/2 cents lower at US$9.86 1/2 per bushel, and January soybeans ended 18 3/4 cents lower at US$9.88 3/4.

 

December soymeal ended US$8.50 lower at US$294.80 per short tonne. December soyoil finished 31 points lower at 37.63 cents per pound. In pit trades, speculative funds were estimated sellers of 7,000 lots in soybeans, and 1,000 lots each in soyoil and soymeal.

 

The extended weather forecast for the U.S. Midwest opens up some harvest opportunities following this week's expected wet conditions, analysts said.

 

The firming of the U.S. dollar during the session had a negative impact on commodities in general and added to the defensive tone. Technical selling was featured as well, with declines accelerating once most active nearby contracts penetrated support at the US$10-per-bushel level and their respective 10-day moving averages.

 

Overall activity was subdued, but reports of South American planting progress picking up momentum and trade ideas that enough new-crop supplies are entering the pipeline to cover near-term needs helped pin prices in negative territory, a CBOT floor analyst said.

 

However, losses were limited by current harvest delays due to wet, cool weather and solid underlying demand, providing support to keep a floor beneath the market.

 

The T-storm Weather forecast said heavy rain will fall over the Midwest the next five days. Rainfall of 0.50 inch to 1.50 inches over the next five days will leave key Midwest states around three times wetter than average for October 2009, T-storm Weather said.

 

Drying will begin Saturday and continue through early next week, though temperatures will stay cooler than usual to prevent rapid drying. Next week will not be as wet as this week, because humidity will be much lower. That being said, completely dry weather is not expected with 0.25 inch of moisture expected next Tuesday and Wednesday across the northern half of the corn belt. The southern half should be drier, which would aid the Delta after renewed flooding later this week, T-storm Weather added in its noon forecast update.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT, with harvest progress expected to be in a range of 45% to 50%, up from the prior week's 30%.

 

 

Soy products 

 

Soy product futures ended lower, keeping pace with the defensive tone in soybeans. The recovery of the U.S. dollar served as a catalyst to attract selling interest. Soymeal futures garnered additional pressure from outlooks for increased soybean availability for crushing if Midwest rains clear out next week, a CBOT floor analyst said.

 

Soyoil futures ended lower on spillover weakness from soybeans and crude oil futures, but did manage to gain some product share value of adjustments in the meal/oil spread relationship.

 

December oil share was 38.95%, while the November/December soybean crush ended at 76 cents.