February 12, 2009

 

CBOT Soy Review on Wednesday: Retreats on Argentine rain, economic fears

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, retreating on speculative sales associated with South American rain and lingering economic woes.

 

CBOT March soybeans finished 16 cents lower at US$9.78. March soy meal settled US$6.40 lower at US$305.70 per short tonne. March soyoil finished 46 points lower at 33.18 cents per pound.

 

The market took on a bearish tonnee from the onset, with heavier-than-expected showers in Argentina overnight and looming economic uncertainties keeping buyers on the run, said Brian Hoops, president Midwest Market Solutions in Yanktonne, South Dakota.

 

Trade speculation that recent rains in Argentina and southern Brazil aided crop potential cast a negative cloud over prices, he said. The rains are seen easing stress and stabilizing field conditions for some South American soybean crops moving through their critical yield development stage.

 

Meanwhile, buyers remain in a cautious mode, unwilling to take on added risk in the face global economic jitters and a lack of fresh bullish news to spark upside movement.

 

However, downside potential remained limited as well, as drier longer term weather outlooks for Argentina remained an underpinning feature to attract commercial buying on breaks, analysts said. The ability of futures to hold support at recent lows and at the March contract's 10-day moving average provided price support as well.

 

The DTN Meteorlogix weather forecast said Argentina got some more rain Tuesday, which was not expected, and that might be beneficial to soybeans. However, dry conditions are forecast for the next seven to 10 days. Temperatures are warming and will go into the 90s Fahrenheit and stay there at least through the weekend, Meteorlogix said.

 

On tap for Thursday, the U.S. Department of Agriculture will issue its weekly export-sales report at 8:30 a.m. EST. Soybean sales are estimated at 400,000 to 800,000 tonnes. Soymeal sales are projected in a range of 100,000 to 200,000 metric tonnes, with soyoil sales expected in a 25,000 to 50,000-tonne range.

 

 

SOY PRODUCTS

 

Soy product futures stumbled in unison with soybean futures, pressured by improved potential for South American soybean crops moving through their critical yield development stage. Soyoil managed to regain some product share on spreads, sustaining price strength for most of the day until a late drop in crude oil attracted selling.

 

March oil share ended at 35.18% and the March crush ended at 59 1/2 cents.