June 24, 2008

 

CBOT Soy Review on Monday: Extends correction; favorable midwest weather

 

 

Chicago Board of Trade soybean futures stumbled Monday, continuing their correction from prior gains, as improved U.S. Midwest weather, demand uncertainties and end-of-month position evening trimmed premium from prices, analysts said.

 

July soybeans settled 17 1/2 cents lower at US$15.15 per bushel and November soybeans ended 6 1/2 cents lower at US$15.02 1/2. July soymeal settled US$7.70 lower at US$404.00 per short tonne. December soyoil finished 63 points lower at 65.02 cents per pound.

 

Weather served as the catalyst to extend the recent downturn in prices, and aggressive weekend planting and replanting as well as outlooks for improved weekly crop ratings took some edge off prices, analysts added.

 

After rallying on fears of lost acreage due to Midwest floods, the market is staging a correction amid ideas weather has turned for the better. Traders speculate that conditions in the Midwest haven't gotten any worse, and with opportunities for late soybean planting, traders are trimming length from the market, a CBOT floor broker said.

 

The market lacked any fresh bullish news to excite buyers, and traders were concerned that the suspension of the Argentine farmers' strike will lead to reduced U.S. export demand, he added.

 

Meanwhile, strength in the U.S. dollar uncovered speculative liquidation as well, with traders booking some end-of-month and quarterly profits, analysts said.

 

The DTN Meteorlogix Weather forecast said the first full week of Northern Hemisphere summer brings a reprieve for the saturated, flooded areas of the Midwest corn belt. Most of the central U.S. is seen dry through Wednesday, allowing for more drying of flooded acreage. Temperatures will be mild, giving established crops a chance at better growing conditions as well.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT Monday. Analysts anticipate soybeans plantings between 90% and 95% complete. Conditions ratings are seen in a range of unchanged to up three percentage points from the previous week.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, retreating in unison with soybeans. The markets are in correction mode, backpedaling on profit-taking pressure. Soymeal moved in step with declines in soybeans, with concerns about declining export demand as Argentina moves closer to opening lines of transportation after the suspension of a farmers' strike attracted selling, analysts said.

 

Soyoil futures were weighed on by speculative selling as well, and declines were limited by spillover support from higher crude oil futures and meal/oil spread unwinding, analysts added.

 

July oil share ended at 43.92% and the July crush ended at 69 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,000 lots.