January 23, 2010

 

CBOT Soy Review on Friday: Retreats on bearish outside influences

 

 

Soybean futures at the Chicago Board of Trade settled lower Friday, garnering pressure from bearish outside market influences.

 

CBOT March soybeans ended 2 1/2 cents or 0.26% lower at US$9.51 1/2, and May soybeans settled 1 1/4 cents or 0.18% lower at US$9.59 1/4.

 

Speculative funds were estimated sellers of 3,000 lots in soybeans, and 2,000 lots in soyoil.

 

The combination of broad asset class losses, fears of declining fund buying as a result of possible tougher regulations on U.S. banks and bearish supply fundamentals weighed on prices.

 

Futures have settled into a consolidative mode, with market uncertainties making it tough to embolden buyers to step up to the plate, particularly in featureless trade, said John Kleist, broker/analyst with Allendale Inc.

 

The market continues to maintain a bearish posture, but strong export demand on the recent price break and the inability of futures to challenge recent lows sends a signal that CBOT soybeans have found value to hold demand together, Kleist added.

 

Solid weekly export sales data, emerging concerns about hotter and drier Argentina crop conditions, and lower than expected private acreage outlooks helped limit downside risks.

 

"While fresh export sales and weekly export sales data eased the pain of recent losses, positive reaction was muted amid concerns fresh China demand maybe a flash in the pan before the Lunar New Year holidays," said Kleist.

 

China is expected scale back its buying from U.S. origins after the lunar holidays, as its focus will shift to South America's record harvest, he said.

 

Overall activity was subdued, as traders took a cautious view ahead of the weekend following a two-week slide to 3-month lows earlier in the week.

 

U.S. Department of Agriculture reported total weekly soybean export sales were a net 990,600 metric tonnes for the week ended Jan. 14, with 929,600 tonnes sold for delivery in the 2009-10 marketing year. The primary buyer was China at 700,400 metric tonnes.

 

Private analytical firm Informa Economics on Friday increased projected U.S. soybean for 2010. The firm pegged 2010 soybean acreage at 77.9 million, up from the 77.5 million acres the USDA said was planted last year, and higher than Informa's December estimate of 77.0 million.

Soy products

 

Soymeal futures ended mixed, with the nearby March future stumbling late in unison with the rest of the soycomplex. However, most contracts edged higher, buoyed by meal/oil spreading, and higher-than-expected weekly export sales.

 

Soyoil futures ended lower, succumbing to spillover pressure from weakness in crude oil futures and a lack of fresh supportive news to underpin prices, analysts said.

 

USDA said soymeal weekly export sales were a net 417,600 tonnes. Trade estimates ranged from 150,000 to 300,000 tonnes.

 

March soymeal settled at US$1.10, or 0.78%, lower at US$286.40. March soyoil dropped 29 points, or 0.38%, to 36.71 cents per pound.

 

March oil share was 39.08% while the March soybean crush ended at 83 3/4 cents.