January 19, 2007

 

CBOT Soy Review on Thursday: Ends down on energy weakness, profit taking

 

 

Chicago Board of Trade soybean futures ended lower Thursday after the neighboring corn market showed weakness and under pressure from weaker energy prices, sources said.

 

March soybeans ended 5 3/4 lower at US$7.16 1/4 a bushel, and May ended 5 cents lower at US$7.31 1/4.

 

March soymeal settled US$2.50 lower at US$211.30 per short tonne, while March soyoil ended 15 points lower at 28.82 cents a pound.

 

CBOT soybean futures opened higher with firmer CBOT corn prices, and CBOT March soybeans hit an early contract high of US$7.28 1/2, exceeding the previous contract high of US$7.27. Soybeans, however, turned lower as corn values slipped off their highs, an analyst said.

 

Trading was choppy after the early attempt to rally fail, traders noted. Soybeans were following corn but could not return to the upside even after corn did because of weakness in crude oil futures, a source added.

 

"You're getting a lot of outside influence," said Tim Hannagan of Alaron Trading. "Your gold is down. Your silver is down."

 

Fund selling of about 3,000 contracts also was a feature, a source added.

 

There also further pressure from profit-taking after recent gains, Hannagan added.

 

"Pretty much we're seeing the index funds taking profits off overbought conditions," he said.

 

Favorable growing conditions in South America and sizable U.S. old-crop stocks also weighed somewhat on the market, a source said.

 

The DTN Meteorlogix weather firm reported that southern Argentina is going through a period of hot and dry weather, with temperatures reaching more than 100 degrees Fahrenheit on Wednesday.

 

"So far this week, the hot weather has not moved into central Argentina's corn and soybean belt," the firm noted.

 

Still, Cordoba and southern Buenos Aires provinces have some heat in store during the end of this week, Meteorlogix said. The trend needs to be watched over the next five days for possible intensifying during the critical pod-set stage in Argentina's crop, the firm said.

 

Nevertheless, there are still ideas that soybeans need to keep pace with corn prices to avoid losing acreage in the spring, he noted.

 

In pit trades, ADM bought 1,000 March, while Fortis bought 300 March. Fimat bought 500 March and sold 500 March. Calyon and Iowa Grains each sold 1,000 March. JP Morgan sold 400 March.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended lower with soybeans, backpedaling after moving higher early in the session. Spillover weakness from soybeans and crude oil weighed the products down, floor traders said.

 

Lower values for corn also pressured soymeal, though losses were limited by meal/oil spreading, a trader noted.

 

In soyoil pit trades, JP Morgan bought 600 March and sold 400 March. Bunge bought 400 March. Funds sold an estimated 500.

 

In soymeal pit trades, ADM, Fimat and Prudential each bought 800 March. Tenco sold 400 March. JP Morgan, Fimat and Bunge each sold 300 March. Funds sold an estimated 500. March soymeal settled US$2.50 lower at US$211.30 per short tonne, while March soyoil ended 15 points lower at 28.82 cents a pound.