September 18, 2008

 

CBOT Soy Review on Wednesday: Consolidates; supportive outside influences

 

 

Supportive influences from outside markets and the absence of speculative liquidation served as catalysts to spark consolidation in Chicago Board of Trade soybean futures following a recent string of losses.

 

November soybeans ended 15 cents higher at US$11.39.

 

December soymeal settled US$3.20 higher at US$322.70 per short tonne. December soyoil finished 35 points higher at 44.42 cents per pound.

 

Oversold market conditions, rising crude oil and precious-metal futures pulled buyers off the sidelines, as a flight to quality in metals masked jitters associated with global economic uncertainty, analysts said.

 

Weakness in the U.S. dollar was another feature that offset global financial concerns, with tight near supplies and the uncertainty of 2008 U.S. soybean yields providing strength to buoy prices, analysts added.

 

The market started on a mixed note, with the hangover effect of recent declines limiting buying interest, but as buying filtered through commodities in general, futures managed to firmly plant themselves in positive territory.

 

The DTN Meteorlogix forecast again features dry conditions during the balance of this week across the Midwest. This trend remains favorable for allowing fields to dry out after recent heavy rains and offers the potential for improving crop-yield prospects despite numerous difficulties this growing season.

 

U.S. and European model forecasts for the jetstream next week have some differences but in general continue to keep frost out of the forecast for the Midwest. This outlook means no corn-belt frost worries through the end of September. Temperatures generally will be near to above normal across the region, Meteorlogix added.

 

On tap for Thursday, the U.S. Department of Agriculture at 8:30 a.m. EDT will issue its weekly export-sales report. Soybean sales are estimated at 200,000 to 600,000 tonnes. Soymeal sales are projected in a range of 50,000 to 130,000 metric tonnes, with soyoil sales expected in a zero to 10,000-tonne range.

 

In pit trades, speculative fund buying is estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures staged a modest recovery from prior losses. A recovery in crude-oil futures and general consolidation across the commodity sector served as catalysts to stabilize the complex, analysts said. Tight underlying supplies continue to underpin soymeal, while soyoil benefited from crude oil and technical buying, traders added.

 

December oil share ended at 40.77% and the November/December crush ended at 59 1/2 cents.

 

Speculative fund buying was estimated at 2,000 lots in soymeal.