March 6, 2009

 

CBOT Soy Review on Thursday: Falls on outside markets, poor export sales

 

 

Chicago Board of Trade soybean futures slid to double-digit losses Thursday on pressure from sinking U.S. stocks and disappointment over export sales.

 

Nearby March soybeans fell 13 cents to US$8.62 1/2 a bushel, while May soybeans lost 16 1/2 cents to US$8.52. May soymeal tumbled US$6 to US$261.30 per short tonne, and May soyoil dropped 28 points to 30.71 cents per pound.

 

Steep drops in equities and crude oil dragged down the soy complex, analysts said. The losses were a turnaround from Wednesday, when strong outside markets helped lift grains and soybeans.

 

"We continue to mirror what the stock market does in the soy complex," said Brian Hoops, president of Midwest Market Solutions.

 

May soybeans hit an open outcry session low of US$8.43. That was near a support level at US$8.39, Hoops said.

 

Poor weekly U.S. soybean export sales contributed to the bearish tonnee, analysts said. Export sales for the week ended Feb. 26 were 155,800 tonnes, a marketing-year low, according to U.S. Department of Agriculture.

 

"Marketing-year sales got everybody pretty bearish," said Sid Love, analyst for Kropf & Love Consulting.

 

The market will watch to see whether export demand recovers next week, traders said. They are waiting for a resolution to discussions about increased government involvement in agricultural exports out of Argentina, a major soy exporter, they said.

 

"Will Argentina actually start exporting?" Love asked. "They're huge. If they come unglued and don't ship anything, that would shift some demand over here" to the U.S.

 

Traders also are trying to figure out how many acres U.S. farmers will plant to soybeans and corn this spring, Love said. "They think the farmer's going to plant more beans, so that's part of this" slide," he said.

 

Commodity funds sold an estimated 3,000 contracts.

Soy Products

 

CBOT soy product futures closed lower with soybeans as the complex followed sinking outside markets, analysts said. Soyoil is linked to crude oil because soyoil is used to make biofuels.

 

"What crude oil does has an impact on soybean oil," Love said.

 

May soymeal fell to a session low of US$258.50, which is a support level, Hoops said. Commodity funds sold an estimated 1,000 soymeal contracts and 1,000 soyoil contracts.