March 10, 2010

 

CBOT Soy Review on Tuesday: Ends near unchanged; bounces off early lows

 

 

Soy futures on the Chicago Board of Trade ended mostly lower Tuesday but well off session lows, as prices rebounded from an early slide on end-of-the-day position evening.

 

CBOT March soy ended 1 cent or 0.11% higher at US$9.41 1/2, and May soy settled 1/2 cent or 0.05% lower at US$9.47 1/2.

 

Traders took the opportunity to square some positions heading toward Wednesday's supply-and-demand report, reducing their risk exposure in the event of a surprise in the government's balance-sheet revisions, a CBOT floor analyst said.

 

Futures initially slid to a one-month low, pressured by bearish underlying fundamentals and outside market influences. A firmer U.S. dollar and lower crude oil futures provided pressure, as did rising Brazilian crop estimates.

 

Underlying cash-market weakness for soymeal aided the defensive tonnee, with reports of a pickup in cash soy sales lending pressure as well, traders said.

 

However, as outside market pressure waned and follow through selling failed to emerge, sellers began to cover some previously sold positions in preparation for Wednesday's crop report.

 

"Heading into a government report with a neutral position is the second-best seat in the house, as it reduces your exposure to any unexpected data from the report," a CBOT floor analyst said.

 

The U.S. Department of Agriculture is scheduled to release its March supply-and-demand revisions Wednesday at 8:30 a.m. EST (1330 GMT). USDA is expected to tighten its March U.S. soy supply-and-demand tables, with alterations to exports and crush projections trimming ending stock forecasts.

 

 

Soy Products

 

Soyoil futures settled modestly higher, recovering from earlier declines, as traders covered positions heading down the stretch. The market managed to shake off the bearish influence of lower crude oil futures, garnering strength from continued adjustments in the oil/meal spread relationship, analysts said.

 

Soymeal futures finished with a steady-to-lower undertonnee, managing to trim earlier losses on end-of-the-day position squaring. The market garnered strength from speculative short covering, as sellers took some profits after prices dipped to one-year lows in early trade, analysts said. Soymeal was initially pressured by large commercial deliveries posted against the nearby contract. The deliveries were seen as a reflection of weakness in the current cash soymeal market.

 

March soymeal settled US$0.50 or 0.19% lower at US$259.00, and the May contract ended unchanged US$258.70 per short tonne. March soyoil gained two points or 0.05% to 39.97 cents per pound, while the May contract settled two points or 0.05% higher at 40.30.

 

May oil share was 43.73% while the May soy crush ended at 65 cents.