February 13, 2008

 

CBOT Soy Review on Tuesday: Stumbles lower; speculative sales, wheat spillover

 

 

Chicago Board of Trade soybean futures ended lower Tuesday on speculative selling amid spillover weakness from plunging wheat futures, analysts said.

 

March soybeans ended 5 cents lower at US$13.21, July soybeans finished 5 1/4 cents lower at US$13.49 1/4 and November soybeans ended 11 cents lower at US$12.71. March soymeal settled US$3.20 lower at US$352.30 per short tonne. March soyoil finished 36 points higher at 55.66 cents per pound.

 

The absence of fresh supportive news combined with heavy losses in wheat futures attracted speculative selling to trim some of the premium put in the market on the wheat market's historic run to higher levels previously, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The wheat market was a drag on prices, erasing earlier gains as futures remained respectful of outside market influences, traders added. Analysts kept an eye on wheat futures throughout, with a downturn in metal and energy markets aiding the lower theme as well, analysts said.

 

Nevertheless, bullish underlying fundamentals with stout demand, uncertainty still surrounding crops in parts of South America and underlying technical support remain as buffers to limit downside momentum, analysts added.

 

Looking ahead, traders will keep an eye on wheat for further signs of long liquidation, while the need to buy acres from corn and spring wheat serve as catalysts to keep a floor under prices, a CBOT floor broker said.

 

The DTN Meteorlogix Weather Service forecast said light to moderate showers are in store for northern Brazil soybean areas during the rest of this week. The rainfall will not be as heavy as noted in January, however, and thus will not bring a significant round of harvest delays to the region. In southern Brazil, scattered showers with temperatures varying on either side of normal result in a generally beneficial weather pattern for soybeans in the filling stage, Meteorlogix added.

 

Argentina's central crop belt will have drier weather this week, but recent rains have brought generally favorable condition to crops. Argentina's temperature pattern will also be near to below normal - thus, no significant hot-weather threat is in store for this week, Meteorlogix forecasts.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal succumbing to spillover pressure from soybeans. Soymeal stumbled lower with beans, as speculative selling was consistent once wheat tumbled and soybeans followed suit, analysts said.

 

Soyoil futures ended higher, bouncing back from choppy, two-sided early activity on technical buying and meal/oil spread unwinding, analysts added.

 

March oil share ended at 44.13% and the March crush ended at 66 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.