August 23, 2006
CBOT Soy Review on Tuesday: Mixed, but soyoil pulls beans to firmer
Soy complex futures at the Chicago Board of Trade ended mixed on Tuesday in a quiet volume trade, with a move higher in soyoil pulling up soybeans into the closing bell.
Soymeal ended with modest losses.
Most-active November soybeans settled 1 cent firmer at US$5.62 1/4 a bushel. December soyoil settled up 29 points at 26.05 cents a pound. December soymeal lost 70 cents to US$161.10 a short tonne.
Light speculative and commercial buying helped soyoil pushed into firmer ground and spillover support took soybeans along. The soybean market was holding just under steady in light volume trade so it took very little to lift it up, floor traders said.
Soybeans found mild support at the recent lows and little interest in pressing it further.
"The crushers really don't want to press meal that much and there really hasn't been a big desire to push beans lower. We've had opportunities, and when we get to US$5.40-US$5.50 (for November) and there's not much interest to go lower," said Jerry Gidel, analyst at NARMS Inc.
Gidel said with the Brazilian real strength, South America soybean farmers have been discouraged to plant the oilseed. There has been wide speculation that Brazilian soy acreage would be lower for the next growing season. "If they plant less and there happens to be a drought," it would be supportive for prices, he said.
Tuesday was day two for the 2006 John Deere/Pro Farmer Midwest crop tour. Very little disease pressure was seen for Nebraska soybeans on one leg of the western side of the tour. Pod counts in a 3-foot-by-3-foot area were in the 500-800 range, scouts reported. The highest soybean yield thus far Tuesday was seen in Jefferson County, where the pod count was 1,334.4 in the 3-foot-by-3-foot area.
In one route on the eastern tour, plentiful moisture was also cited for producing surprisingly heavy pod counts in soybean fields in Indiana. Fields seen along one tour route estimated average pod counts of 1,373.8 pods per square yard, up 7% from local 2005 levels. Some light disease pressure was found in surveyed soybean fields Tuesday, most notably from a fungus that flourishes in cold wet weather and produces sudden death syndrome, a condition which can cause localized but devastating yield reductions.
In soybeans, Man Financial bought 1,000 November; Rand bought 400 November. Sellers include Calyon selling 1,000 November. Produce Grain, ABN Amro and Man Financial each spread 300 November-September.
Soy products
Soy products ended mixed, with soyoil gaining again over soymeal this week. Commercials were net buyers of 1,000 contracts and this buying helped soyoil end firmer. Funds were also light buyers in soyoil.
Strength in crude oil was cited behind the mild strength, as investors buy up soyoil for its biodiesel needs.
Activity in soymeal was very light, with funds net sellers in the thin market.
In soymeal there were scattered buyers. Sellers include Prudential selling 400 December. Tenco spread 400 September-December.
In soyoil buyers include Bunge buying 400 September and 400 December; Calyon buying 500 December; JP Morgan buying 200 September and 200 December; Rand buying 600 December. Sellers include FIMAT selling 500 December and O'Connor selling 200 December.
