October 10, 2008
CBOT Soy Review on Thursday: Climbs on technical buys; position evening
Chicago Board of Trade soybean futures ended higher Thursday, bouncing on technical buying and pre report position evening.
November soybeans ended 16 cents higher at US$9.80.
December soymeal settled US$7.20 higher at US$276.00 per short tonne. December soyoil finished 2 points higher at 39.79 cents per pound.
The session's gains were largely an extension of Wednesday's technical reversal, with background help from supportive weekly export sales data, said John Kleist, broker/analyst at Allendale Inc.
Oversold market conditions opened the door for the technical bounce, with uncertainties tied to Friday's crop reports and tight farmer holding of supplies enticing traders into covering or evening up some positions.
Otherwise, activity was light as traders were unwilling to take on added risk, as world economic concerns are still a source of uncertainty in the marketplace, Kleist said.
The uncertainties of the market were seen limiting upside potential, with weakness in crude oil, volatile activity in equity markets and the Yom Kippur holiday keeping many traders sidelined, analysts added.
The DTN Meteorlogix forecast said most of the Midwest will have dry and warm weather through Saturday, which will boost conditions for harvest. Farmers will want to work quickly on that because it's expected to start raining again on Sunday. The western Midwest will see from three-tenths of an inch up to an inch and a half on Sunday and Monday. The eastern Midwest is forecast to get a lesser amount, up to three-quarters of an inch on Monday and Tuesday.
Temperatures across the Midwest are trending above normal through the weekend, Meteologix said. Temperatures cool down in the western side of the region on Monday and Tuesday, but stay above normal in the eastern Midwest until the middle of next week, according to the forecast.
On tap for Friday, U.S. Department of Agriculture is scheduled to release its October crop report at 8:30 a.m. EDT (1230 GMT). The average of analysts' estimates in a Dow Jones Newswires survey projects a crop size of 2.920 billion bushels with a yield of 39.9 bushels per acre. The averages ranged from 2.847 billion to 3.001 billion bushels for production and 38.9 to 40.9 bushels an acre for yields. In September, USDA projected a crop size of 2.934 billion bushels using a yield of 40.0 bushels an acre.
The average of analysts' estimates projects ending stocks at 188 million bushels. The averages ranged from 137 million to 258 million bushels. In September, USDA projected the 2008-09 carryout at 135 million. In pit trades, speculative fund buying was estimated at 3,000 lots.
SOY PRODUCTS
Soy product futures ended higher, with soymeal leading the way. Higher than expected weekly export sales, spillover from soybeans, technical buying and meal/oil spreading served as the catalyst to limit soymeal, analysts said. Soyoil futures nudged higher, but continued to lose product share to soymeal on spreads, with spillover pressure from crude oil limiting gains, analysts added.
December oil share ended at 41.89% and the November/December crush ended at 65 cents.
Speculative fund buying was estimated at 1,000 lots in soymeal, while commercial buying was estimated at 1,000 lots in soyoil.