February 12, 2008

 

CBOT Soy Review on Monday: Lower; losses limited by corn recovery

 

 

Soybean futures on the Chicago Board of Trade closed lower but near the session high Monday, pressured by lower corn and sharply lower wheat futures prices.

 

However, bullish soybean traders were encouraged by soybeans' ability to fend off selling pressure amid the late collapse in Chicago and Kansas City wheat futures prices.

 

March soybeans closed down 13 cents a bushel at US$13.26 and July soybeans closed down 13 1/2 cents a bushel at US$13.54 1/2.

 

Corn traded sharply lower early in the session but recovered to close modestly lower, which limited selling pressure in soybeans.

 

"Soybeans held up pretty well in late trading as the wheat market came unglued," said a market analyst. Indeed, soybean traders kept one eye on the wheat markets Monday. Wheat was a steep roller-coaster affair that saw Chicago and Kansas City prices trade the expanded limit up of 60 cents in early trading, only to back way off and trade the limit down of 60 cents in late trading, closing sharply lower on the day.

 

"The action in Chicago and Kansas City wheat (on Monday) does not bode well for the corn and soybean markets, either," said the analyst. He said the soybean complex and corn have been a follower of the wheat market during the recent rallies.

 

Weekly USDA export inspections figures were deemed supportive for the soybean market, as weekly inspections came in at 37.804 million bushels, versus 29.843 million registered last week.

 

Weather in South American soybean-producing regions is presently termed a "mixed bag" by one analyst. Weekend rains favored pod-filling in Brazil's southern sections, while rains northern Brazil could delay harvesting there.

 

Technically, recent price action in March soybean futures has raised the possibility of a bearish double-top reversal pattern forming on the daily bar chart, if prices do back off the rest of this week, said a market technician. He added that last week's twin peaks on Wednesday and Friday, with low-range closes on those days, are certainly not bullish from a technical stand point. He added that the soybean market has seen a good run higher, to all-time highs, the past three weeks, and at least more of a corrective pullback soon would not be a surprising technical development.

 

Resistance for March soybeans is located at Monday's high of US$13.35 and support is seen at Monday's low of US$13.14.

 

 

SOY PRODUCTS

 

Soybean oil and soybean meal futures also closed lower Monday. Soybean oil futures closed nearer the session high as losses were limited by sharply higher crude oil futures prices, said an analyst. However, soybean meal closed near the session low.

 

March soybean meal closed down US$6.00 a tonne at US$355.50. March soybean oil closed down 12 points at 55.30 cents.

 

The products were also pressured by losses in the corn market and steep losses in wheat futures.

 

The market technician said the low-range close in soybean meal futures is technically bearish. March soybean meal finds technical support at Monday's low of US$354.00 and then at US$351.50.

 

March soybean oil futures find technical support at Monday's low of 54.65 cents and then at 54.32 cents. Resistance is seen at Monday's high of 55.50 cents and then at 55.75 cents.