February 19, 2009

 

CBOT Soy Review on Wednesday: Extends losses; lacked supportive features

 

 

Chicago Board of Trade soybean futures settled lower Wednesday, extending the market's downtrend amid a lack of fresh supportive news and improved prospects for South American crops.

 

CBOT March soybeans dropped 15 1/2 cents to US$8.87 1/2, and May soybeans settled 18 cents lower at US$8.86 1/2. In pit trades, speculative fund selling was estimated at 4,000 lots.

 

March soy meal settled US$6.10 lower at US$277.40 per short tonne. March soyoil finished 73 points lower at 30.42 cents per pound.

 

The market closed on its lows, reflective of the bearish features affecting prices, with uncertain economic outlooks, technical weakness and rains during South America's key pod filling stage keeping buyers on the run, analysts said.

 

A quiet news front promoted a choppy, two-sided theme in early action, but without a supportive fundamental boost or a spark from outside markets, futures rekindled their bearish stance, with selling accelerating down the stretch, traders said.

 

The market continued to extract premium from prices, with the most active March contract sliding to its lowest level since Dec. 23.

 

Concerns surrounding the global economy and the bearish impact it could have on demand continued to attract selling, with speculative funds active sellers as they trim risk exposure in an uncertain economic climate, analysts said.

 

Meanwhile, Argentina's developing 2008-09 soybean crop got a boost from recent showers which led the Agriculture Secretariat to raise its forecast Wednesday to 17 million hectares (42 million acres), up from 16.5 million hectares forecast last month.

 

The DTN Meteorlogix Weather forecast for crop areas in Argentina features a more scattered outlook for significant 1-inch-plus rainfall in the central crop belt during the next few days. Rain chances arrive on the heels of some hot weather Wednesday and Thursday. The best chance for thunderstorms appears to be Friday. This is especially likely for major corn and soybean areas, Meteorlogix said in the forecast.

 

U.S. Department of Agriculture's weekly export sales report, normally released on Thursday, will be delayed until Friday 8:30 a.m. EST due to Monday's Presidents Day holiday.

 

 

SOY PRODUCTS

 

Soy product futures continued on a downward path Wednesday, succumbing to speculative-led selling in step with soybeans. Soymeal futures stumbled to a new eight-week low on the back of technical pressure, improved crop outlooks for Argentina, and sluggish domestic demand, analysts said.

 

Soyoil futures followed the lead of soybeans, with weakness in crude oil helping extend the market's slide to two-month lows.

 

March oil share ended at 35.41% and the March crush ended at 57 1/2 cents.

 

In pit trades, speculative fund selling was estimated at 2,000 lots in soyoil.