January 3, 2009

 

CBOT Soy Review on Friday: Lower; retreats from highs on profit taking

 

 

Soybean futures on the Chicago Board of Trade ended lower Friday, backpedaling from an early session run to 3-month highs on speculative profit taking.

 

CBOT March soybeans finished 3 cents lower at US$9.77.

 

March soy meal settled US$0.40 higher at US$300.20 per short tonne. March soyoil finished 28 points higher at 33.88 cents per pound.

 

The market satisfied a near-term technical objective of climbing above chart resistance at November highs, but once the feat was accomplished the market lacked follow-through buying and profit taking set in, analysts said.

 

Solid underlying export demand particularly from China coupled with South American weather issues underpinned prices.

 

China has been an aggressive buyer of soybeans due to their government holding domestic prices well above imported values, analysts said.

 

However, a lack of any other fresh news, a firm U.S. dollar and thin holiday markets encouraged traders to book profits and reduce risk exposure heading into the weekend.

 

Without any fresh inputs for traders to digest, there was enough for bulls and bears to cling to, helping promote the two-sided day, said Chad Henderson, analyst with Prime Agricultural Consultants.

 

In pit trades, speculative fund seller was estimated at 1,000 lots.

 

The DTN Meteorlogix weather forecast said temperatures in Argentina will warm up by Sunday to near or above normal. Monday will be dry, and only a few light showers are expected Tuesday. While recent rains are beneficial for the crop, more is needed.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 512,000 metric tonnes for the week ended Dec. 25. Sales for 2008-09 were a net 510,600 metric tonnes. Analysts had forecast sales between 250,000 and 450,000 metric tonnes. The primary buyer was China with 356,500 metric tonnes.

 

USDA also announced Friday private export sales of 115,000 metric tonnes of U.S. soybeans for delivery to China in the 2008-09 marketing year.

 

 

SOY PRODUCTS

 

Soy product futures finished higher bouncing back from two-sided market activity. The absence of fresh fundamental news left traders struggling to find direction amid mixed influences from soybeans and outside markets. Soyoil futures led the upside gains, benefitting from advances in crude oil and the realignment of the meal/oil spread.

 

March oil share ended at 36.17% and the March crush ended at 49 1/4 cents.

 

In pit trades, speculative fund buying was estimated at 1,000 lots in soyoil.