January 19, 2008

 

CBOT Soy Review on Friday: Grinds lower on technical sales, profit-taking

 

 

Chicago Board of Trade soybean futures ended lower Friday, continuing their consolidation from prior highs on speculative profit-taking and technical weakness.

 

March soybeans ended 7 cents lower at US$12.64, July soybeans finished 8 cents lower at US$12.97 1/2 and November soybeans ended 14 3/4 cents lower at US$12.55 1/4. March soymeal settled US$5.00 lower at US$339.30 per short tonne. March soyoil finished 23 points higher at 53.14 cents per pound.

 

The market was a little top heavy in the absence of fresh supportive news, with technical charts turning a bit negative and rain moving into dry areas of Argentina enticing traders to book some profits ahead of the holiday weekend, said Vic Lespinasse, analyst with Illinois Grain.

 

The lower theme was consistent, with signs of the market achieving an intermediate top in prior sessions, and overbought technical signals applying pressure to keep futures firmly planted in negative territory, analysts added.

 

Overnight weakness in Asian markets coupled with lingering worries of a global economic slowdown raised concerns over future demand and when the market's poor technical performance of late is added, nervous longs were willing to trim some length, analysts added.

 

Meanwhile, the DTN Meteorlogix weather forecast said a few thundershowers are in store for the driest areas of Argentina's major corn and soybean areas, including La Pampa and southwestern Buenos Aires early next week. However, this is not expected to change the situation significantly as warmer and drier weather returns for the balance of the period.

 

In the southern half of Brazil's soybean areas, the best chance for scattered thundershowers during the coming weekend appears to be for Parana and Mato Grosso do Sul. Showers in Rio Grande do Sul should be light. Cooler weather later this weekend and Monday means little stress to soybeans. However, longer-range charts for Rio Grande do Sul bring an uncertain outlook, as warmer and drier conditions develop in far southern Brazil during the balance of next week, Meteorlogix reports.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal futures stumbling lower with soybeans.

 

Soymeal futures ended on the defensive, sliding to 3-week lows on technically motivated speculative selling, analysts said. Technical weakness, a lack of fresh supportive news and spillover weakness from soybeans served as the catalyst to promote consolidative profit-taking, traders added.

 

Soyoil futures ended mixed, with nearby contracts finishing higher on solid underlying demand and the unwinding of meal/oil spreads, analysts said. Technically, the market has held underlying support levels this week, and that limited selling pressure, a CBOT floor analyst said.

 

March oil share ended at 43.92% and the March crush ended at 67 cents.

 

In soymeal trades, Tenco bought 400 March, Newedge USA LLC bought 600 March, with sellers widely scattered. Speculative fund selling was estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.