February 6, 2010

 

CBOT Soy Review on Friday: Beans drift lower after choppy trading

 

 

Soy futures at the Chicago Board of Trade finished a choppy, two-sided session modestly lower Friday, consolidating above recent lows in the absence of fresh fundamental news.

 

CBOT March soy ended 1/2 cent, or 0.05%, lower at US$9.13 1/2, and May soy settled 1/2 cent, or 0.05%, lower at US$9.24 1/4.

 

Speculative funds were estimated sellers of 2,000 lots in soy, 1,000 lots in soymeal, and 2,000 lots in soyoil.

 

The market lacked any conviction to move higher or lower, with bearish outside market influences capping advances and a lack of fresh bearish news limiting downside pressure, analysts said.

 

The U.S. dollar continued its climb, with crude-oil, metal and equity futures lower once again.

 

Futures have seemingly found a level of value, with oversold conditions and short covering ahead of the weekend and Tuesday's supply-and-demand reports offering support to prices.

 

The market remains in a down trend, but the bearish features of record South American crops and sparse near-term export demand have been discounted in the market, a CBOT floor analyst said.

 

However, without any overtly bullish news to excite buyers, the market isn't able to mount anything more than a short-covering bounce in a bear market. Nevertheless, the ability of futures to hold psychological support at the US$9.00 level this week attracted bottom picking and end-user buying, traders said.

 

The U.S. Department of Agriculture is scheduled to be release its February supply-and-demand report Tuesday at 8:30 a.m. EST (1330 GMT). The USDA is expected to fine tune its supply-and-demand tables, with alterations to exports and crush projections tightening the balance sheet.

 

The average of analysts' estimates peg 2009-10 U.S. soy ending stocks at 219 million bushels, down 26 million from January's forecast. The estimates ranged between 170 million and 245 million bushels.

 

 

Soy Products

 

Soyoil futures stumbled Friday, backpedaling on corrections in the soyoil, soymeal spread relationship and spillover weakness from continued price weakness in crude-oil futures, analysts said.

 

Soymeal futures ended narrowly mixed, struggling to find direction in choppy trade. The market followed the lead of soy, consolidating above recent lows, traders said.

 

March soymeal settled US$0.20, or 0.07%, lower at US$271.00. March soyoil dropped 21 points, or 0.56%, to 37.00 cents a pound.

 

March oil share was 40.51%, while the March soy crush ended at 89 3/4 cents.