August 29, 2008

 

CBOT Soy Review on Thursday: Retreats on rains, crude slide pressures

 

 

Chicago Board of Trade soybean futures stumbled Thursday, backpedaling as traders extracted risk premium amid beneficial rains moving through upper Midwest crop areas.

 

September soybeans settled 15 1/2 cents lower at US$13.32 1/2 and November soybeans ended 24 cents lower at US$13.24.

 

December soymeal settled US$6.20 lower at US$358.80 per short tonne. December soyoil finished 85 points lower at 54.08 cents per pound.

 

Better-than-expected rains moved through Minnesota and Iowa overnight and with the precipitation moving into northern Illinois Thursday, traders had less incentive to push the market, said Vic Lespinasse, analyst with Grainanalyst.com.

 

A retreat in crude oil prices aided the declines, with speculative fund selling featured, traders added. Meanwhile, lower-than-expected weekly export sales and a monthly crush figure raised fears of demand rationing to add to the market's setback, analysts added.

 

Otherwise, activity was quiet despite the sharp slide in prices, as traders continued to take a cautious approach heading into the extended Labor Day holiday weekend, a CBOT floor broker said.

 

Meanwhile, the DTN Meteorlogix weather forecast said rains through the western and north-central Midwest crop belt are helping maintain or improve prospects for filling crops, especially for soybeans. There is no significant cold weather expected for the Midwest region during the next 7 days. The long range outlook is more uncertain but Meteorlogix tends to lean toward only somewhat cooler conditions during the last part of the 10 day forecast, favoring the west.

 

The U.S. Department of Agriculture reported total weekly soybean export sales were a net 143,100 metric tonnes. Analysts had forecast sales between 50,000 and 400,000 metric tonnes. Net sales for the 2007-08 crop year resulted in a net sales reduction of 193,300 tonnes for the week ended Aug. 21. Sales for the 2008-09 marketing year were 336,400 tonnes.

 

The U.S. Census Bureau pegged the July soybean crush at 139.1 million bushels, down from the June crush figure of 140.99 million bushels. In a survey of analysts, the average of estimates was 140.3 million bushels.

 

In pit trades, speculative fund selling was estimated at 3,000 contracts.

 

 

SOY PRODUCTS

 

Soy product futures fell in unison with soybeans, with soyoil garnering additional pressure from weakness in crude oil futures and negative sentiment flowing through the market amid a surplus of world vegoils, analysts said.

 

Soymeal futures backpedaled as well, losing some ground to soyoil and the markets realigned oil/meal spreads, analysts added.

 

December oil share ended at 43% and the November/December crush ended at 61 3/4 cents.

 

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