January 15, 2009

 

CBOT Soy Review on Wednesday: Mostly down on profit-taking, outside markets

 

 

Profit-taking and weak outside markets weighed on Chicago Board of Trade soybean futures Wednesday, although traders continue to keep a close eye on Argentina's weather amid supportive concerns about dryness.

 

March soybeans settled unchanged at US$9.71 1/2 per bushel, and May soybeans slipped 1/2 cent to US$9.80 1/4. March soymeal rose US$2 to US$297 per short tonne, while March soyoil fell 78 points to 34.05 cents per pound.

 

Traders took money off the table after soybeans had "a little bit of a pop" Tuesday, a CBOT floor analyst said. Sinking crude oil prices and losses in the stock market were bearish influences, he said.

 

"The outside markets ran out of gas," he said.

 

Dryness in Argentina is still an important factors for the market, traders said. Argentina is the world's No. 3 soybean producer and exporter behind the U.S. and Brazil.

 

"You've got a weather market that's developed in South America, more Argentina than anything," an analyst said. "That's got everybody concerned some."

 

Heat is expected to sweep across Argentina's drought-stressed crops next week, private firm T-Storm Weather said in a forecast. Soy and corn are battling a severe drought that threatens to slash yields.

 

"We're looking at the possibility of lower production," an analyst said. "You're right in the middle of the growing season."

 

 

Soy Products

 

CBOT soy product futures finished mixed, with soymeal rising as soyoil slipped with crude oil, traders said. Soyoil is linked to crude oil because it is used to make biodiesel.

 

NOPA's soyoil stocks estimate was seen as bearish, traders said. Stocks were pegged at 2.176 billion pounds, above trade expectations of 2.062 billion.

 

"You didn't grind as many beans and you found more soyoil than you expected to find," an analyst said. "Fundamentally, it's bearish."

 

Concerns about dryness in Argentina underpinned the whole soy complex, an analyst said. Argentina is the world's leading exporter of soyoil and meal.