August 28, 2008


CBOT Soy Review on Wednesday: Mixed, lacked any follow-through momentum



Chicago Board of Trade soybean futures ended higher Wednesday, settling above unchanged levels after a choppy session amid the market's inability to generate follow-through buying in either direction.


September soybeans settled 10 1/2 cents higher at US$13.48 and November soybeans ended 3 1/2 cents higher at US$13.48.


December soymeal settled US$2.20 lower at US$365.00 per short tonne. December soyoil finished 33 points higher at 54.93 cents per pound.


Midwest crop weather and outside market influences provided a mixed tonnee for futures, as the market remains sensitive to weather in soybean's critical stage of development, analysts said.


"Soybeans did not have enough of a weather threat to promote a breakout to the upside, and not enough rain to press the market," said Brian Hoops, president Midwest Market Solutions in Yanktonne, South Dakota.


Futures initially rose on speculative buying amid a weaker U.S. dollar and strength in crude oil and precious metals. However, the advances were offset by reports of better than expected rains in northwest and central Iowa, analysts added.


The market settled into a range, chopping along with supportive outside influences with the uncertainties of the 2008 crop and tight old crop supplies keeping prices underpinned. Upside movement in the most active November contract continued to falter as prices challenged the contract's 100-day moving average, traders said.


Meanwhile, DTN Meteorlogix weather forecast said rain falling in the northern and western Midwest, which will alleviate some of the recent problems soybeans had with dry conditions. Up to three-quarters of an inch of rain is expected Wednesday and Thursday in Nebraska, Iowa and Minnesota. Thursday into Friday, Wisconsin and Illinois will get a similar amount. The weekend will be dryer, but more rain could develop Monday and Tuesday, Meteorlogix said.


Temperatures will be normal to slightly above normal for the next few days, but DTN Meteorlogix is projecting a cold front moving in, which will drop temperatures, once again impeding crop development and boosting chances for an early frost.


In pit trades, speculative fund selling was estimated at 1,000 contracts.


On tap for Thursday, the U.S. Census Bureau is scheduled to release its monthly soybean crush report for July at 8:00 a.m. EDT (1200 GMT). The crush is expected to decrease to 140.3 million bushels from 140.9 million reported in June, according to a survey of industry analysts. Estimates for the report ranged from as low as 140 million bushels to as high as 141 million bushels.


U.S. Department of Agriculture at 8:30 a.m. EDT will issue its weekly export sales report. Soybean sales are estimated at 50,000 to 400,000 tonnes. Soymeal sales are projected in a range of 25,000 to 155,000 metric tonnes, with soyoil sales expected in a zero to 10,000-tonne range.





Soy product futures ended mixed, with soyoil regaining product share on spreads. Soyoil also climbed on borrowed strength higher crude oil futures and strength in world vegoil markets, analysts said. Soymeal was pressured by light profit taking on meal/oil spreads analysts added.


December oil share ended at 42.94% and the November/December crush ended at 59 1/4 cents.


Speculative fund selling was estimated at 2,000 lots in soymeal, with speculative fund buying estimated at 1,000 lots in soyoil.


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