January 1, 2008

 

CBOT Soy Review on Monday: Ends lower on year-end profit-taking

 

 

Chicago Board of Trade soybean futures finished lower Monday amid end-of-the-year profit-taking, traders said.

 

January soybeans fell 8 3/4 cents to US$11.99, and March soybeans ended down 8 3/4 cents at US$12.14 1/4. March soymeal rose US$3.20 to US$336.70 per short tonne, and March soyoil slipped 4 points to 49.63 cents per pound.

 

The soybean market has room to pull back after climbing to fresh 34-year highs last week, traders said. Commodity funds sold an estimated 4,000 contracts.

 

There was also some early, follow-through pressure after a wild close Friday, in which a sharp drop in electronic futures prices at the close left a disparity between prices in the pit and on the screen, an analyst said.

 

Rains forecast for South America also were seen as bearish, an analyst said. During the next week to 10 days, periodic shower activity and warm temperatures will favor developing soybeans in Brazil, DTN Meteorlogix said.

 

Argentina's weather pattern, meanwhile, continues to display the potential for turning hotter and drier during the first part of January, Meteorlogix said. Upper-atmosphere high pressure off the west coast of South America will bear watching, the private weather firm said.

 

Going into the New Year, weather in Brazil and Argentina will have the biggest impact on soybean prices until U.S. planting intentions are released next spring, said Jerry Gidel, analyst for North America Risk Management Services in a note to clients. After early dryness in Brazil, moisture has been received in most areas, keeping production potential near the current USDA forecast of 62 million metric tonnes, he said.

 

There are also ideas that index funds will start rebalancing on the fifth business day of 2008, which is Jan. 8, AgResource Company said in a market comment. The funds are expected to sell soybean and wheat contracts and buy corn.

 

Large speculative traders increased their long positions by 2,431 contracts and added 1,552 contracts to their short positions and are now net long 126,643 contracts, the Commodity Futures Trading Commission said in a supplemental Commitment of Traders report. Index funds added 1,131 contracts to their long positions and trimmed 185 contracts from their short positions and are net long 184,952 contracts, the CFTC said.

 

Deliveries posted against the CBOT January soybean future on first notice day Monday were 302 contracts, within trade expectations. Analysts had predicted deliveries of zero to 1,000 lots.

 

 

SOY PRODUCTS

 

CBOT soy product futures finished mixed, as soyoil felt pressure from heavy deliveries on first notice day, traders said. Deliveries against the CBOT January soyoil future were 9,908 contracts Monday. - "This was a surprise, no question about it," an analyst said about the heavy soyoil deliveries.

 

Deliveries against the CBOT January soymeal future were 1,677 contracts. ADM Investor Services was the top issuer with 1,391 lots. Citigroup Global Markets was the top stopper with 898 lots. The last trade date assigned was Dec. 20.

 

Soymeal felt a boost from some light soymeal-soyoil spreading, traders said. Commodity funds bought an estimated 3,000 soyoil contracts and sold an estimated 3,000 soyoil contracts.