January 28, 2010

 

CBOT Soy Review on Wednesday: Tumbles to lowest price since october

 

 

Chicago Board of Trade soy futures Wednesday tumbled to their lowest prices since October on prospects for a big crop in South America and pressure from other markets.

 

March soy fell 18 1/2 cents, or 2%, to US$9.29 a bushel. That was its lowest close since Oct. 7.

 

Expectations for blockbuster crops in Brazil and Argentina pressured prices as strong crops will add supplies to the global market. Widely scattered thunderstorms this weekend and substantial storms next week will "end" short-term dryness deficits in Argentina, according to an updated forecast from T-Storm Weather.

 

Soy slumped with neighboring grains and with crude oil and precious metals. Strength in the U.S. dollar was seen as a bearish influence on commodities, an analyst said.

 

The losses for soy were a turnaround from gains Tuesday, when the soy complex bucked a weaker trend in the grains. Soy pulled back Wednesday after "rallying against the tide," a trader said.

 

There was chatter about President Obama's State of the Union speech Wednesday night amid concerns about a proposal to curb proprietary trading by banks. The move could reduce fund activity in agriculture markets, a CBOT floor trader said.

 

Uncertainty about bank reform was a factor for equities but "one step removed from being a factor for the soy and corn," said Anne Frick, senior oilseed analyst for Prudential. She is more interested to hear whether the president addresses energy policy.

 

Commodity funds sold an estimated 5,000 soy contracts.

 

 

Soy Products

 

CBOT soy product futures closed in negative territory with soy. Commodity funds sold an estimated 2,000 soyoil contracts and 1,000 soymeal contracts.

 

March soymeal closed down US$6.10, or 2.1%, at US$281.30 per short tonne. March soyoil tumbled 45 points, or 1.2%, to 36.32 cents per pound.

 

Traders on Thursday will watch for a weekly export sales report and data from the U.S. Census Bureau. All the numbers are due out at 8 a.m. EST.

 

The Census Bureau is expected to peg the December soy crush at 172.9 million bushels, up from 168.6 million in November, according to a Dow Jones survey of analysts. Soyoil stocks are estimated at 3.077 billion pounds, compared to 2.904 billion in November, and soymeal stocks are estimated at 491,000 short tonnes, compared to 633,700 tonnes in November.