July 29, 2008

 

CBOT Soy Review on Monday: Higher; consolidates, weather underpins

 

 

Chicago Board of Trade soybean futures ended higher Monday, continuing their consolidation of prior losses, with weather concerns an underlying influence.

 

August soybeans settled 1 1/2 cents higher at US$14.00 1/4 and November soybeans ended 9 1/2 cents higher at US$13.96.

 

December soymeal settled US$4.10 higher at US$364.30 per short tonne. December soyoil finished 15 points higher at 60.60 cents per pound.

 

The market was in a consolidation mode once again, stabilizing after heavy losses in the past two weeks, with concerns over weather as the U.S. soy crop heads toward its critical pod-setting period serving as the backdrop for the gains, analysts said.

 

Traders added some risk premium back into prices, with heavy rains in Iowa and Missouri in the past weekend and forecasts for hot, drier conditions later in the week attracting buyers, analysts added.

 

Stability in outside markets, with crude oil and metal futures firmer, aided the advances, as speculative selling seemingly took a breather after prior losses, a CBOT floor broker said.

 

However, nearby contracts lost ground to deferred months, as traders unwound some old/new crop spreads ahead the delivery period for August futures as well some end-of-the-month position squaring, he added.

 

Meanwhile, a very warm/hot pattern should temporarily unfold from Friday through early next week in the U.S. corn belt, according a forecast from T-Storm Weather. Mostly dry weather should temporarily occur because it appears that the jet stream should move far enough north to prevent rain, and upper-level temperatures should be warm enough to suppress thunderstorms for a bit, T-Storm forecasts.

 

By next week, the temporary hotter and drier pattern will be unable to continue for a long period. This is simply based on recent history, hints from models, and basic physics that suggest high humidity from high soil moisture in the western Corn Belt should be enough to return to this year's favored summer pattern of near-average warmth and near- to above-average wetness, T-Storm Weather reports.

 

However, although rainfall this week may not be particularly heavy for eastern areas of the corn belt, most areas should receive some rain prior to the onset of temporary heat, T-Storm reported in the forecast.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT. Analysts surveyed by Dow Jones Newswires anticipate a 1- to 2-percentage-point increase in U.S. soybean crops rated in good to excellent condition.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended higher, bouncing late with soybeans. The late gains erased a mixed tonnee that produced higher soybean and lower soyoil values for most of the day. Meal/oil spreading was featured, with meal gaining product share, but soyoil climbed late on borrowed strength from soybeans, crude oil and end of the day positioning, traders said.

 

December oil share ended at 45.41% and the November/December crush ended at 72 cents.

 

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

 

In soyoil trades, buyers and sellers were scattered among various commission houses.

 

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