CBOT Soy Review: Higher; Small Fund Buying Supports

    Chicago Board of Trade soybean futures rose Tuesday in a role reversal of sorts, as small commodity fund buying supported the market while funds decided to sell corn and wheat futures, an analyst said.

    The opposite occurred Monday as late selling took soybeans toward session lows by the closing bell and corn and wheat closed sharply higher on strong fund buying.

Below-normal temperatures forecast this week for the Midwest and dry conditions in parts of the eastern belt also were supportive for the market.

    July soybean futures settled 5 1/2 cents higher at $6.45 1/2 a bushel and November was 8 cents higher at $6.46. July soymeal was up $1.10 at $198.70 and July soyoil was up 19 points at 22.87 cents a pound.

    "All things considered, I think it was an impressive performance," said Vic Lespinasse, floor broker and analyst at A.G. Edwards, referring to the rebound in soybeans from a lower open.

    Soybean futures opened weaker on follow-through selling from Monday and overnight losses, but the market held support early at the session low of $6.37. Prices broke into higher territory shortly thereafter as the selling dried up and locals began to buy. Upside momentum built slowly until a late buying spurt took the contract to the session high of $6.46 a bushel.

    The July contract continues to build technical strength as it trades above its major moving averages and in the upper end of its recent range, sources said.

Fundamentally, the market is concerned about the cool Midwestern temperatures and its slowing effect on emergence, Lespinasse said. Soybean emergence is at 27 percent, 1 percentage point behind the five-year average.

    "The market is worried about the cool conditions and the relative lack of moisture in the eastern corn belt currently, with not much rain in the forecast, and that has been a supportive influence," he said.

    Lespinasse said he expects soybeans to continue on a higher course, with support coming from delayed crop development and the uncertainty surrounding the impact Asian rust will have on the U.S. crop this year.

    "It hasn't happened yet, but remember the USDA said by midsummer they expect Asian rust in the Midwest. The day that announcement is made, that could be a very bullish day," said Lespinasse, adding that there will likely be a learning curve before U.S. farmers learn to deal effectively with the fungal disease that can slash yields by 70-80 percent.

    In trades, D.T. Trading bought 800 July, Man Financial bought 500 July, and Calyon bought 200 July. Other buyers were light and scattered.

Cargill sold 500 July, FCStone, Term Commodities and Goldenberg-Hehmeyer each sold 200 July while Produce Grain and Refco sold a net 100 July.

    ADM spread 900 July/November contracts.

Funds bought an estimated 600 soybean contracts on the day.  
   

Soy Products 
 

    The products closed firmer, supported by the gains in soybeans and fund buying of their own.

    July soymeal, like soybeans, continues to hold above its moving averages in a sign of technical strength.

    Soymeal was supported by Kottke buying 600 July, Rand Financial buying 500 July, Refco buying a net 400 July, and Produce Grain, CIS and R.J. O'Brien each buying 300 July. D.T. Trading and Goldenberg-Hehmeyer each sold 300 July meal.

    July soyoil rose slightly on light fund buying. The contract reached a high of 22.97 cents and settled just beneath that level.

    Produce Grain bought 1,000 July oil, Refco bought a net 100 July, and Man Financial bought a net 200 July while Tenco and Kottke each bought 200 July and ADM bought 200 July and 200 August. On the sell side, Cargill sold 200 July, while other sellers were light and scattered.  

 - By Tom Sellen; Dow Jones Newswires