DJ CBOT Soy Midday: Strong Gains On Weather Concerns

CHICAGO (Dow Jones)--Soybean futures on the Chicago Board of Trade were
posting strong gains at midday Monday, as concerns about crop stress fueled
bullish enthusiasm.

At 11:05 a.m. CDT (1605 GMT), July soybeans were 19 cents higher at $7.43 a
bushel, November soybeans were 19 cents higher at $7.60 1/2 a bushel, July
soymeal was $3.70 higher at $232.70 a short ton, and July soyoil was 74 points
higher at 25.82 cents a pound.

Hot, dry weather conditions forecast for key areas of the central and eastern
Midwest this week was the primary driver of the market, as worries that the
conditions could lower yield potential and further tighten the projected
2005-06 balance sheet underpinned prices, analysts said.

Local and speculative buying were featured attractions, as the market
continued to factor in risk premium in the face of soil-moisture shortages in
the eastern soybean belt. The combination of dry weather outlooks for the next
two weeks, lingering fears of Asian rust and aphids as well as talk of a
reduction in soybean acreage from the March prospective-plantings report
provided a bullish theme to attract fresh speculative capital to the market,
traders said.

Nevertheless, overbought market conditions attributed to the heavy buildup of
speculative longs in the market and the inability of futures to challenge
overnight gains uncovered commercial selling and speculative profit taking to
trim the initial advances, analysts said.

Meanwhile, in the critical crop areas of the central and eastern Midwest,
especially central Illinois through central Indiana, the Meteorlogix forecast
calls for another week of mostly dry weather. Scattered light showers will
occur during the week, but total precipitation will be mostly less than
one-half inch.

In addition, the showers that do take place will largely bypass the driest
areas of central Illinois, Meteorlogix said. This dry weather pattern will be
accompanied by very warm temperatures, with highs in the 83-90 degrees
Fahrenheit range, which is slightly above normal for the region. While
temperatures themselves won't be stressful, the continued lack of soil moisture
will further stress corn and soybeans, the forecast said.

In early soybean pit trades, ADM Investor Services and Refco each bought 300
November, and Citigroup and Man Financial each bought 500 November.

On the sell side, Cargill sold 1,000 November, Fimat sold 1,300 November,
Rand Financial sold 400 November and Refco sold 300 November.


Soy Products


Soyoil futures extended their technical breakout, with speculative-led buying
keying early market strength. Spillover momentum from soybeans, commercial
buying tied to end-users extending coverage and worries associated with the
slow start to India's monsoon season helped propel July futures to their
highest level since May 12, 2004.

Soymeal kept pace with the bullish tone circulating through the complex,
climbing to new highs on spillover momentum from the weather-induced rally in
soybeans.

July oil share improved to 35.66%, and the July crush was at 53 1/4 cents.

In soymeal trades, Citigroup bought 200 October. Refco sold 200 July and 200
August.

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