August 30, 2008

 

CBOT Soy Review on Friday: Consolidates ahead of holiday weekend

 

 

Chicago Board of Trade soybean futures ended mixed Friday, after chopping around from a firm start as the market consolidated heading into an extended holiday weekend.

 

September soybeans settled 1/2 cent lower at US$13.32 and November soybeans ended unchanged at US$13.24.

 

December soymeal settled US$0.80 lower at US$358.00 per short tonne. December soyoil finished 12 points higher at 54.20 cents per pound.

 

Pre-weekend and month-end position squaring took center stage against a backdrop of uncertainties of Midwest weather and near-term exports while the potential impact of Tropical Storm Gustav promoted cautious activity, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Futures initially spiked higher on early gains in crude oil and weakness in the U.S. dollar, but as the session unfolded a reversal in those outside markets and the sensitivity of soybeans to weather attracted sellers, as traders reduced risk heading into the weekend, analysts added.

 

The potential impact of Gustav could be two-fold, as the storm could stymie U.S. exports from the Gulf, but could provide good finishing rains for soy crops if remnants of the storm push rain into Midwest crop areas, Scoville said. "That uncertainty was enough to promote caution ahead of the holiday weekend," he added.

 

Meanwhile, there are many different forecasts flying around in the weather community right now regarding the rain potential in the Midwest late next week from the remnants of Tropical Storm Gustav, Cropcast Weather Services said.

 

Cropcast's 6- to 10-day forecast turned wetter Friday in the western Midwest, as both the GFS and European weather models have suggested a fairly wet pattern in the west. However, any shift in Gustav's landfall to the east - closer to Mobile Bay - could quickly reduce this rain potential for the Midwest, Cropcast said. There are still plenty more questions than answers regarding this forecast, Cropcast added.

 

In pit trades, speculative fund buying was estimated at 2,000 contracts.

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil gaining product share on the unwinding of meal/oil spreads, technical buying and overnight strength in Asian vegoil markets. Soymeal experienced two-sided action, succumbing to late selling pressure on month-end position-evening, spillover from soybeans and weakness on spreads, traders said.

 

December oil share ended at 43.08% and the November/December crush ended at 59 3/4 cents.

 

Speculative fund buying was estimated at 1,000 lots in soyoil.