Prairie Farmer, IL
05-22-07
DJ CBOT Soy Review: Ends Down On Rain Forecast, Profit Taking
By Tom Polansek
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--Chicago Board of Trade soybean futures closed in
negative territory Tuesday on profit-taking and forecasts for rain in the eastern
U.S. corn belt, traders and market analysts said.
July soybeans finished 7 1/4 cents lower at $7.93 1/4 per bushel, and November
soybeans ended down 7 cents at $8.22 1/4. July soymeal finished down $0.70 at
$214.80 per short ton, and July soyoil settled down 43 points at 34.83 cents per
pound.
New forecasts from European and American weather models that show
precipitation headed for parts of the "very dry" eastern corn belt on Sunday and
Monday were negative for prices, said Tim Hannagan, analyst at Alaron Trading
in Chicago. Weather is key to the development of the emerging crop, he added.
DTN Meteorlogix said the best chance for moisture in the eastern Midwest was
for up to one-half inch of rain in Illinois and Wisconsin during Wednesday into
Thursday and again during the Memorial Day weekend. Showers and
thundershowers will produce up to one-half inch of rain in the region, the weather
firm said.
Nationally, 21% of the soybean crop had emerged as of May 20, compared to
16% last year and the five-year average of 18%, according to the U.S.
Department of Agriculture.
Large traders also started taking profits ahead of the Memorial Day weekend,
Hannagan said. The rain is forecast to fall in the eastern corn belt while markets
will be closed for the holiday, he noted.
"Really, it was a golden opportunity to take profits off the market," Hannagan
said.
In pit trades, Rand Financial bought 500 July, while Tenco sold 300 July.
Commodity funds sold an estimated 1,000 contracts.
Looking ahead, Hannagan said he expected market participants to take some
profits on any strength going into the holiday weekend.
Better-than expected planting pace in Monday's USDA crop progress report was
an underlying bearish factor for soybeans, traders added. The USDA reported
59% of the U.S. soybean crop was planted as of May 20, above the 52% planted
last year and the five-year average of 48%. Trade estimates had called for 50%
to 55% of the crop to be planted.
Steep losses in CBOT corn and wheat also created a negative tone for
soybeans, a floor analyst said. He noted that soybeans showed some strength
during the session, trading near unchanged around midday, with support from
the sentiment that a lot of the summer growing season still lies ahead of the crop,
he said.
In other news, private exporters reported to the USDA export sales of 500,000
metric tons of soybeans for delivery to China during the 2007/2008 marketing
year, the agency said Tuesday. The 2007/2008 marketing year for soybeans
began September 1.
Officials investigating the purported discovery of Asian soybean rust on crop
residue from an Iowa grain bin, meanwhile, now say that they doubt the infected
sample - comprised of but a single leaf - actually originated from within the state.
A joint statement released Monday by the Iowa Department of Agriculture and
Land Stewardship and Iowa State University said experts have found no further
evidence of Asian soybean rust in the field where the leaf was reported grown, or
in neighboring fields, as well.
SOY PRODUCTS
CBOT soy products futures ended in negative territory as soymeal was unable to
hold earlier gains from light soymeal/soyoil spreading, traders said. Steep losses
in CBOT soybeans pulled meal lower, they added.
Weakness in crude oil futures was also seen as negative for soyoil, a floor trader
noted. Commodity funds bought an estimated 1,000 soymeal and sold an
estimated 2,000 soyoil.
In soyoil pit trades, Rand Financial sold 1,000 July and 300 December. Fimat,
Bunge and Tenco each sold 300 July, while Rosenthal bought 300 July. In
soymeal pit trades, Goldberg Hehmeyer bought 500 July, while Man Financial
and Shatkin-Arbor each bought 300 July. Bunge sold 300 July.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780;
tom.polansek@dowjones.com (END) Dow Jones Newswires
May 22, 2007 15:15 ET (19:15 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.