February 20, 2009

 

CBOT Soy Review on Thursday: Mixed; nearbys stumble on late positioning

 

 

Chicago Board of Trade soybean futures ended mixed Thursday, with nearby contracts stumbling from earlier gains on late position squaring.

 

CBOT March soybeans dropped 3 cents to US$8.84 1/2, May soybeans settled 1/2 cent lower at US$8.86, and November soybeans finished 9 1/4 cents higher at US$8.45.

 

March soy meal settled 90 cents lower at US$276.50 per short tonne. March soyoil finished unchanged at 30.42 cents per pound.

 

Futures maintained a firm tonnee for most of the day, buoyed by supportive outside market influences, oversold conditions and a lack of fresh bearish news to extend recent declines, analysts said.

 

However, as the day unfolded trader concerns about the possible cancelation of overbooked China purchases and a lack of price support in the face of improved South American crop conditions applied pressure to weigh on nearby contracts down the stretch, analysts said.

 

The unwinding of old, new crop spreads was featured as well, with declining South American crop concerns narrowing the July, November spread to 46 1/2 cents premium July from Wednesday's 55 cents.

 

Nearby futures managed to satisfy a near-term downside objective of setting a new low for the current down trend, but worries of an Argentina farmers strike and support from higher crude oil and a weaker U.S. dollar, limited seller participation, a CBOT floor analyst said.

 

A last-minute bid by the government to forestall a strike by Argentine farmers appears to have failed Thursday, as leaders of the country's four main rural groups announced they would accept its offer for a meeting on Tuesday but would go ahead with a sales boycott beginning Friday.

 

Argentina's government invited the leaders of the country's four leading farm groups to talks with the Minister of Production next Tuesday to present their complaints to the government.

 

The DTN Meteorlogix Weather forecast for the central Argentina crop belt calls for rainfall from one inch to two inches in the northern half of the region during the end of this week. The main provinces for this moisture will be Cordoba, Santa Fe, and Entre Rios. This sector of the central crop belt produces three-quarters of the Argentina soybean crop. Precipitation will be lighter, and crop stress greater, in Buenos Aires and La Pampa, Meteorlogix said.

 

In the major soybean areas of Brazil, thunderstorms with heavy rain recently through the northern areas during the upcoming weekend will likely delay and disrupt soybean harvest, Meteorlogix forecasts. Farther south, rains in Rio Grande do Sul will maintain abundant moisture for pod-filling soybeans during the coming days.

 

U.S. Department of Agriculture's weekly export sales report will be released Friday 8:30 a.m. EST. The report was delayed due to Monday's Presidents Day holiday. Analysts surveyed by Dow Jones Newswires estimates soybean sales for the week ended February 12 in a range of 600,000 to 900,000 metric tonnes. Soymeal export sales are seen between 125,000 and 225,000 tonnes, while soyoil sales are pegged between 10,000 and 30,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures end mixed, backpedaling off early market strength in unison with soybeans. Technically oversold conditions provided a boost to prices for most of the day, with outside market support aiding the advances. However, late position-evening and spread adjusting applied late pressure to weigh on prices.

 

March oil share ended at 35.49% and the March crush ended at 59 cents.