November 24, 2009

 

CBOT Soy Review on Monday: Fades from 3-month high as harvest nears end

 

 

Soy futures fell from a three-month high Monday as the completion of the U.S. harvest increases supplies and spurs selling by farmers.

 

November soy on the Chicago Board of Trade fell 4 cents to US$10.42 a bushel, after earlier reaching US$10.66 3/4, the highest price since US$10.68 on Aug. 13.

 

An early, speculative fund-driven rally across the CBOT faded late as U.S. stocks and oil prices pulled back. Continued weakness in the U.S. dollar and gold's rally to a record high above US$1,170 an ounce also encouraged buying in grain futures.

 

With the nation's soy harvest largely finished, many farmers may be locking in prices and sending fresh supplies to market, said Sterling Smith, an analyst with Country Hedging in St. Paul, Minn.

 

"These prices probably provide very attractive hedge levels for the producer," Smith said.

 

As of Sunday, 94% of the soy crop in 18 top-producing states was harvested, up from 89% the previous week but below the five-year average of 97%, according to the U.S. Department of Agriculture.

 

Soy futures remain underpinned by strong exports, particularly to China, traders said.

 

For the week ended Nov. 19, 73.8 million bushels of U.S. soy were inspected for export, according to a USDA report issued Monday. That was up from 62.8 million bushels the previous week and surpassed expectations of 46 million to 65 million bushels.

 

"Soy demand remains quite stout," Smith said. "We've seen very large Chinese purchases come in. We could see further Chinese dealings, which could provide further support to the market."

 

Soymeal and soyoil also rallied early but followed soy lower in late trading.

 

December soymeal fell US$1.50 to US$315.60 per short tonne, and December soyoil fell 0.31 cent to 39.40 cents per pound.

 

Commodity funds sold 1,000 CBOT soymeal contracts and 2,000 soyoil contracts by the end of Monday's session, floor sources estimated.