July 12, 2008
CBOT Soy Review on Friday: Up on tight balance sheet, outside markets
Chicago Board of Trade soybean futures finished Friday's day session posting solid gains, with a tight soybean balance sheet and supportive outside market influences underpinning prices.
July soybeans settled 21 cents higher at US$16.30 1/2 and November soybeans ended 9 cents higher at US$15.96.
December soymeal settled US$4.10 higher at US$428.10 per short tonne. December soyoil finished 2 points higher at 66.02 cents per pound.
The U.S. Department of Agriculture did not provide any significant surprises in its supply and demand reports, but a tighter ending stock forecast and inflationary signals reinforced bullish long-term outlooks to buoying prices, analysts said.
A choppy trading theme produced two-sided action, with favorable near-term crop conditions and ideas the market's rally of the past three days had adequately factored in smaller stock projections attracting profit taking to weigh on prices, analysts added.
Nevertheless, the macro trend of the market remains bullish, with stronger precious metals, crude oil and a weaker U.S. dollar figuring into the market's big picture, said Dan Basse, president AgResource Company. "At this point in the year, trade guesses regarding yields and weather will dominate direction moving forward," he added.
The DTN Meteorlogix weather forecast said a pattern of periodic rains continues to highlight the Midwest weather situation through the next week. A brief round of high temperatures in the 90s Fahrenheit will be mixed in with thunderstorms offering more than an inch of rain over much of the region through the weekend.
Upper-atmosphere wind patterns during the next week bring the jet stream on a continuing track from west to east across the northern tier of states. Hot weather threats will be very slight as a result, Meteorlogix said. Temperature trends will be favorable for most row-crop areas of the Midwest through the central Plains, Meteorlogix added.
The USDA forecast 2008-09 U.S. soybean ending stocks at 140 million bushels, compared to 175 million in June and the average analyst estimate of 139 million. The USDA pegged 2007-08 soybean stocks at 125 million, unchanged from in June. The average of analysts' pre-report estimates was 123 million.
On tap for Monday, the National Oilseed Processors Association is scheduled to release its monthly soybean crush report for June at 8:30 a.m. EDT (1230 GMT). The crush is expected to decline to 136.9 million bushels from the previous report due to one less crushing day in June and seasonal downtime in the industry, according to a survey of industry analysts. Estimates for the report ranged from as low as 134 million bushels to as high as 138.6 million bushels.
In pit trades, buyers and sellers were scattered among various commission houses.
SOY PRODUCTS
Soy-product futures ended higher, after a two-sided session. The markets climbed in unison with soybeans, with late meal/oil spreading weighing on soyoil down the stretch, traders said. Soyoil futures initially spiked with crude oil, but once aggressive buying was exhausted at session highs, profit taking surfaced to trim advances, traders said.
Soymeal managed to rally after a midday slump, climbing on support from soybeans.
December oil share ended at 43.54% and the November/December crush ended at 72 cents.
In soymeal trades, buyers and sellers were scattered among various commission.
In soyoil trades, buyers and sellers were scattered among various commission houses.