November 4, 2008
CBOT Soy Review on Monday: Up; extends consolidative phase
Chicago Board of Trade soybean futures ended higher Monday, continuing the market's consolidation phase, as traders continued to take a cautious approach following recent market volatility.
CBOT November soybeans ended 3 cents higher at US$9.28 1/4 a bushel, and January soybeans finished 4 1/2 cents higher at US$9.37 1/2.
December soymeal settled US$2.20 higher at US$275.20 per short tonne. December soyoil finished 114 points higher at 34.74 cents per pound.
"After the extreme turmoil seen in the marketplace previously, futures have taken on a consolidation mode," said John Kleist, broker analyst with Allendale Inc. in McHenry, Ill.
Traders are unwilling to take an aggressive stand, but strong export demand and a lack of farmer selling remain bullish traits to keep a floor under prices, Kleist added.
Futures failed to sustain momentum in either direction, chopping around amid mixed signals in outside markets. Market participants were said to be taking a subdued approach awaiting the results of Tuesday's U.S. presidential election.
However, the market managed to end higher, supported by strength from soyoil, and the need for futures to maintain some price integrity to attract adequate acreage in South America, Kleist added.
Looking ahead, traders anticipate the market will remain choppy until there are clear signs that the financial sector has stabilized.
The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EST, with analysts anticipating the soybean harvest progress in a range of 83% to 87%.
Commodity risk management firm FC Stonnee will release its November crop production and yield estimates near 4:30 p.m. EST.
The DTN Meteorlogix forecast offers a notable change in the harvest weather pattern for the Midwest this week. A powerful storm system forming off the West Coast will track into the Midwest by Wednesday, bringing up to 2 inches of precipitation - mostly as rain - to the northwestern corn belt - eastern Dakotas, and western Minnesota.
This sector of the corn belt is already the farthest behind on harvest progress, and the moisture will bring additional slowdowns after some headway was made in the past few days, Meteorlogix reported.
Soy product futures ended higher Monday, with the soyoil the upside leader of the complex. Borrowed price strength from soaring Asian vegoil markets set the stage for the bounce, with a correction of the crush spread after settling out of line Friday lifting soyoil futures as well, analysts said.
Soymeal futures climbed in unison with the rest of the complex.
December oil share ended at 38.69% and the November/December crush ended at 59 1/4 cents.