The Chicago Board of Trade soybean market on Tuesday closed lower in the nearby months, firm in the deferreds and well above its lows as weather uncertainty gave support, traders said. "There seems to be a shift today with the focus changing from corn to soybeans," one CBOT floor trader said.
Traders were less worried about this week's weather, which is crucial for pollinating corn, and looked ahead to August, the prime yield period for soybeans.
Corn was pressured by forecasts for scattered showers this week in the Midwest and cooler temperatures by Friday or Saturday. But there were worries that a high pressure ridge might build strength as August approaches.
Speculators hold a huge net long position in the corn market, making it vulnerable to a technical sell-off, while speculators remain short CBOT soybean futures.
August soybeans closed down 1 cent at $5.89 per bushel but off their low of $5.86. New-crop November was off 1/4 at $6.11. In contrast, new-crop December corn closed 5-1/2 weaker at $2.62-1/2.
The US Agriculture Department said late Monday 57 percent of the US soybean crop was in good to excellent condition, down 1 percentage point from a week ago and in line with trade expectations for a 1 to 2 point drop. Spot basis bids for soybeans in the Midwest early Tuesday were firm, underpinned by a lack of farmer sales, dealers said.
The product markets were choppy. Soymeal closed firm while soyoil ended weak as the oil/meal spread corrected slightly. Weakness in the New York crude oil market weighed on soyoil late along with some aggressive moves in the options pit. Tenco bought 5,000 September 26.00-cent soyoil puts and established an options spread to finance the put position, traders said. August soyoil closed 0.43 cent per lb weaker at 26.35 cents and the deferreds were down 0.35 to 0.52.
August soymeal ended $1 higher at $169.90 and the deferreds were 60 cents to $1.50 up. Meal bounced off contract lows made early - the second straight day of contract lows.
Soyoil closed at 43.7 percent of the combined product values of the August contracts, compared to 44.2 percent on Monday. Typically, soyoil makes up 38 to 40 percent of the combined value of meal and oil. But aggressive interest in soyoil by funds based on growth prospects for soy biodiesel has driven the relationship to historic levels.
Funds sold about 6,000 soybean contracts, 3,000 soyoil and 4,000 soymeal, traders said. Soybean volume was moderate and heavier in the products. In soybeans, an estimated 68,814 futures and 24,770 options. Soyoil volume was pegged at 37,731 futures and 9,047 options. Estimated soymeal volume was 37,569 futures and 2,619 options. In the futures delivery market, there was only one July delivery in the soy complex. A customer of J.P. Morgan issued one soyoil contract and a customer of RJ O'Brien stopped it.
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