Chicago Board of Trade soybean futures ended higher on Monday, rebounding from last week's dive to a one-month low as forecasts called for hotter, drier weather in early August as the crop moves into its critical growing phase, traders said.
"Everyone is still trying to second guess the weather. But volume was light," said one CBOT floor broker. August soybeans closed 6-1/4 cents higher at $5.83-1/4 per bushel and new-crop November was 6-1/4 firmer at $6.04-3/4.
During August the soybean crop sets pods, leaving it vulnerable to extremely hot weather, while the corn crop is nearing the end of its key pollination stage of development.
A heat-producing, moisture-robbing high pressure atmospheric ridge that is currently in the far west will move into the central Midwest by Friday and Saturday, said Meteorlogix forecaster Joel Burgio.
"The driest area and the area of most concern is in eastern South Dakota, south-west Minnesota and north-west Iowa," Burgio said. Dry weather continues to stress corn and soybean crops in that region, he added.
But good rains and cooler temperatures blanketed the Midwest last week. Both were expected early this week. The US Department of Agriculture late Monday said it rated 54 percent of the US soybean crop as good to excellent, down 3 points from the week before. During the day, there were mixed opinions from traders about whether the government would change its crop ratings from last week after rains in parts of the Midwest.
USDA reported early Monday that 10.8 million bushels of soybeans were inspected for export last week, which was close to trade estimates for 5 million to 10 million.
But the world's top soy buyer, China, was absent from the list of shippers. Poor Chinese crushing margins was one reason for the quiet interest in US soybeans. Also, South American soybeans are more competitively priced.
Midwest spot basis bids for soybeans were steady to firm early Monday, after last week's drop in futures prices and lackluster farmer sales, dealers said.
The products were firm, following soybeans. Soyoil also got a boost from the New York crude oil market, which turned around late in the session. Soyoil, a green fuel ingredient, continues to track moves in energy markets, acting more like a fuel than a food.
August soymeal closed up $1.40 at $167.90 per ton, with deferreds up $2.10 to down 60 cents. August soyoil closed 0.13 cent higher at 26.30 cents per lb, with the deferreds up 0.07 to 0.20.
Malaysian palm oil futures closed lower. Commodity funds bought about 2,000 soybean futures and 1,500 soyoil and 1,500 soymeal, traders said. Volume was on the lighter side across the complex. In soybeans, an estimated 48,843 futures and 21,264 options traded. Soymeal trade was pegged at 26,899 futures and 1,444 options. Estimated soyoil volume was 21,263 futures and 1,510 options.
Trade data issued by the Commodity Futures Trading Commission on Friday showed large speculators were net short in CBOT soybeans and soymeal, while expanding their longs in soyoil, as of July 18.
In soybeans futures/options, funds were long 57,226 contracts, down 5,637 from the previous week, and short 63,515 contracts, up 3,625 lots. For soymeal futures/options, large speculators were long 31,464 contracts, up 3,601, and short 54,739 contracts, up 12,153 lots. In soyoil, large speculators were long 94,087 contracts, up 4,776, and short 20,865 contracts, up 2,012.