Following higher overnight trade, soy futures turned down after the morning open on profit taking, and in sympathy with weakness in the wheat market. Fundamental news for the day was limited to S American weather updates, which remain warm and dry for the next 10 days. January and March soybeans were able to build late day support after both contracts closed out open chart gaps that were left from Monday’s trade. Commodity fund traders were estimated sellers of 9,000 soybean, 5,000 soymeal, and 4,000 soyoil contracts.
Soymeal has lead the soy trade this week, lifting CBOT soy crush margins. The spot spread today traded as high as $1.20/bu and closed at $1.15, verus $.74 a year ago. Forward margins are also similarly strong, giving processors the opportunity to lock down an average margin of $1.09/Bu to the end of the year versus $.83 a year ago.
Next week’s WASDE report is expected to show a slower US export forecast and larger end stocks, though the market this week is following S American weather. We look to add to both old and new crop sales on rallies back towards the summer highs.
