SOYCOMPLEX COULD RALLY ON TIGHT U.S. FEED SUPPLY
Nearby months in soybean and soymeal
futures could post a short-term rally on tightening supply of
livestock feed, even if favorable growing conditions keep the
new crop outlook bearish, traders said.
    "A lot of soymeal dealers are just getting very worried
about where processors will get their soybeans this Summer,"
one Illinois soyproduct dealer said.
    Processors are competing vigorously with river dealers for
the few soybeans being offered by country elevators, with a
Decatur, Illinois processor raising its spot soybean basis bid
another two cents today to 10 over July futures.
    Farmer marketings of old crop soybeans continue very light,
with flat prices apparently well below levels they are willing
to sell, dealers said.
    Some terminal elevator operators are coming to the belief
that even if futures rally back to last month's highs, country
movement may remain light because farmers in many areas are
sold out of old crop soybeans, particularly in the eastern half
of the Midwest.
    Soybean processors will continue to take seasonal downtime
for maintenance if soybeans remain difficult to buy, reducing
the weekly soybean crush rate still further and keeping the
spot soymeal basis strong, dealers said.
    Futures traders said tight cash supplies should help July
soybeans and soymeal gain on deferreds. July soymeal has
already moved to a premium over the August through October
months and old crop July/new crop November soybeans may also
move to a July premium later this month, they added.
 Reuter
