February 28, 2008

 

CBOT Soy Review on Wednesday: Profit-taking allows for minor correction

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, staging a minor technical correction from contract highs on profit-taking in the absence of aggressive speculative buyers.

 

March soybeans ended 7 3/4 cents lower at US$14.59, May soybeans settled 9 cents lower at US$14.75 1/4, July soybeans finished 8 3/4 cents lower at US$14.88 3/4 and November soybeans ended 20 cents lower at US$14.07. May soymeal settled US$5.40 lower at US$373.80 per short tonne. May soyoil finished 44 points higher at 65.47 cents per pound.

 

End-of-the-month position evening and the absence of aggressive fund buying allowed futures to take a breather from their bullish ascent to historic levels in previous sessions, analysts said.

 

The defensive tonnee was consistent with overbought market conditions and ideas futures satisfied a near-term upside objective Tuesday, allowed participants to sit back and evaluate future direction ahead of the delivery period, traders said.

 

Despite Wednesday's lower theme, analysts say longer- range bullish fundamentals will continue to limit downside pressure, while cautious buying eases upside movement until fresh fundamental influences emerge.

 

Meanwhile, traders said March madness will not only refer to collage basketball this year, but also serve as the start of the official 2008 acreage debate, as private estimates and the prospective plantings report begins to shift attention to new-crop uncertainties, a cash-connected CBOT broker said.

 

On tap Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST. Trade estimates put soybean export sales at 400,000 to 650,000 metric tonnes. Soymeal sales are projected in a range of 75,000 to 125,000 metric tonnes, with soy oil sales expected in 10,000- to 20,000-tonne range.

 

U.S. soybean crush for January is expected to be 161 million bushels in the U.S. Census Bureau's monthly report, down from the December crush figure of 162.4 million bushels. The Census Bureau's crush report is scheduled for release Thursday at 8 a.m. EST (1300 GMT). January soymeal stocks are seen declining to 320,000 short tonnes, down from the 405,500 tonnes reported for December. Soyoil stocks are seen rising to 3.158 billion pounds in the report, up from 3.058 billion the previous month.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil futures rallying to new all-time highs on the close.

 

Speculative-led buying continues to buoy soyoil futures, as bullish demand outlooks and tightening supplies of world vegoils bolster bullish enthusiasm, analysts said. With crude oil continuing to hover near the US$100-per-barrel mark and supportive projections from the world vegoil conference in Malaysia feeding bullish appetites, any price break attracts speculative commercial buying, a CBOT floor analyst said.

 

Soymeal futures ended lower across the board, backpedaling on oil/meal spreading and a lack of fresh supportive news to underpin feed markets, analysts added.

 

March oil share ended at 46.84% and the May crush ended at 67 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with JP Morgan a buyer of 600 July and Prudential Bache a buyer of 300 May. Tenco sold 500 December. Speculative fund selling estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative funds net buyers on the day.