Soybean futures at the Chicago Board of Trade closed firm on Tuesday on a lower government rating of the US soy crop and forecasts for hot, dry weather, traders said. But soybeans came off early highs made when new-crop November climbed above its 100- and 200-day moving averages near $6.13.
Soybeans were pressured by the weakness in soybean oil, which tracked the energy markets. New York crude oil prices slipped more than $1 per barrel amid easing concerns about the Mideast.
August soybeans closed 2 cents higher at $5.85-1/4 per bushel and November ended 2-1/4 up at $6.07, after climbing to $6.14-1/2. "There's renewed concern over weather and the extended forecast for the western areas, where we saw the crop decline," said one CBOT trader. "If we do have a return of heat during the pod-fill stage, it will cause more difficulties."
August is the most vulnerable time for US soybeans as that is when they set and fill pods - a key yield-determining factor. The US Agriculture Department said Monday 54 percent of the US soybean crop was in good to excellent condition, down 3 points from last week.
In several states west of the Mississippi River, soybean conditions deteriorated. Among them was Iowa, the top soy producer, where 61 percent of the crop was good to excellent, versus 67 percent the prior week.
"I'm certainly keeping my eye on the western Corn Belt. There hasn't been anything to improve soil moisture levels there," said Drew Lerner, meteorologist at World Weather Inc in Kansas City. "The high pressure ridge is coming back into the forecast for late this week and all of next week, which will certainly add stress to crops," he said.
The market also drew support from the options pit. Term Commodities bought 4,500 September $6 call options and put on a spread to finance the purchase. Rand Financial bought 2,000 September $6 calls.
In exports, Taiwan was tendering on Wednesday for 30,000 to 60,000 tonnes of US or Brazilian soy. There was also talk that China was seeking three cargoes of Argentine soybeans.
Spot basis bids for soybeans late Tuesday were steady to firm at interior points and mixed at river terminals, after country sales picked up when the CBOT rallied early, dealers said.
The soy products were underpinned by the firm close in soybeans. Soymeal got an extra lift from the unwinding of oil/meal spreads, triggered by the weakness in the energy markets, traders said.
August soymeal closed $1 per ton higher at $168.90 and the deferreds were were up 30 cents to $1.70. The soyoil market turned lower as crude oil fell. August soyoil closed 0.02 cent lower at 26.28 cents per lb., with back months down 0.10 to up 0.05. The August crush settled close to unchanged at 75.52 cents per bushel.
Funds bought 1,500 soybean futures, 2,000 soymeal and sold 3,000 soyoil, traders said. Man Financial was featured spreading meal/oil and commercials Term Commodities and Tenco were net buyers of soyoil. Malaysian palm oil futures closed firm, fuelled by improved exports.
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