In The News - 27/07/2005
Soybean
futures at the Chicago Board of Trade closed higher Tuesday as worries about the
size of the U.S. soybean crop resurfaced due to forecasts for hot, dry weather
for the Midwest by early August, traders said.
That
ignited aggressive buying by commodity funds. New-crop November soybeans rallied
28-1/2 cents to $7.11, surging through its 10-, 20- and 50-day moving averages.
But the market backed off its early highs on wetter midday forecasts for the
six- to 10-day period.
"They
never should have been up that much to begin with. We were looking for a two
percentage point increase in the good to excellent and we got one, so it wasn't
that dramatically different," said Dale Gustafson, Citigroup analyst,
referring to the weekly crop ratings.
"Apparently,
the midday forecasts for next week were suggesting a little cooler and a little
more moisture," Gustafson said.
August
soybeans <SQ5> closed 6-1/4 cents per bushel higher at $6.76 and new-crop
November <SX5> was up 6-1/2 at $6.89.
August
is the critical yield-determining month for U.S. soybeans as they set and fill
pods. But the crop is ahead on maturity this year due to heat stress, forcing it
to set pods early. The government reported that 36 percent of U.S. pods were set
by Sunday, compared to 26 percent for the five-year average.
But
soybeans benefited from recent rains in the U.S. crop belt last week. The U.S.
Department of Agriculture late Monday said it rated 54 percent of the U.S.
soybean crop as good to excellent, up 1 percentage point from the week before.
Midwest
cash basis bids for soybeans were mixed early Tuesday, firmer in the east and
weaker in the west.
The
soymeal and soyoil markets followed the moves in soybeans, falling off their
highs as the session progressed. Soymeal managed to close firm, with August
<SMQ5> up $1.20 at $213.40 per ton. But soyoil market ran into a technical
sell-off late, and the August contract <BOQ5> settled 0.16 lower at 24.43
cents per lb. The CBOT August crush was 5.37 cents per bushel lower at 62.21
cents.
The
U.S. cash meal market remained underpinned by western processors taking
downtime. But demand was quiet, especially exports as importers turned to
cheaper supplies from Brazil and Argentina.
Overnight
export news featured South Korea buying 55,000 tonnes of South American soymeal.
Malaysian
palm oil futures closed firm overnight. Palm oil rebounded after a rise in rival
CBOT soyoil that lent support to a market that had lost almost 4 percent in the
previous two sessions, traders in Kuala Lumpur said.
Volume
was on the heavier side across the complex. Estimated soybean volume was 94,909
futures and 21,530 options. Soymeal trade was pegged at 38,098 futures and 2,506
options. In soyoil, an estimated 33,203 futures and 2,828 options.
Traders
estimated that commodity funds bought about 4,000 soy contracts, 2,000 soymeal
and were about even in soyoil.
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