March 11, 2008

 

CBOT Soy Review on Monday: Most lower, but rebound; selling exhausted

 

 

Chicago Board of Trade soybean futures ended mostly lower Monday, but well off early limit- down losses, as strength in outside markets and the exhaustion of speculative liquidation allowed futures to find some stability.

 

March soybeans ended 47 cents higher at US$13.88, May soybeans settled 2 1/4 cents lower at US$14.06 1/2, July soybeans finished 1/2 cent lower at US$14.20 1/2 and November soybeans ended 11 1/2 cents lower at US$13.00. May soymeal settled US$8.00 higher at US$358.30 per short tonne. May soyoil finished 119 points lower at 62.14 cents per pound.

 

Volatile, two-sided action was featured, with futures rising to positive territory from limit-down levels before subsequently retreating again.

 

The fact that soyoil could trade off limit-down levels offered support to buyers, with a rise to record highs in crude oil and a generally tight supply scenario serving to underpin features, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

Talk of some hedge funds being forced to liquidate some positions to avoid increased credit risks was seen aiding the early slide to limit-down levels, traders said.

 

However, the exhaustion of speculative long liquidation as the day unfolded allowed futures to shift their focus back to the fundamental picture, and with Tuesday's supply and demand report expected to reaffirm a tight balance sheet, prices found some stability, analysts said.

 

The U.S. Department of Agriculture is scheduled to release its March supply and demand report Tuesday at 8:30 a.m. EDT. The report is not expected to cause much of a stir in the soybean futures market, as analysts anticipate only a tweak to balance-sheet line items. However, it may reveal revised usage figures, with the potential for small adjustments in soybean use for crush, exports and residual.

 

The average of 14 analysts' estimates surveyed by Dow Jones Newswires projects ending stocks at 153 million bushels. The averages ranged from 130 million to 160 million bushels. In February, USDA projected the 2007-08 carryout at 160 million bushels.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended mixed.

 

Soyoil experienced volatile, two-sided action after trading off limit-down levels for the first time in two trading days. Soyoil opened limit down, but managed to bounce off its lows, buoyed by exhausted selling interest, end-user buying and spillover support from a record high climb in crude oil futures, a cash-connected CBOT broker said.

 

The market had corrected enough, with an overall bullish fundamental outlook and the exhaustion of aggressive speculative fund selling opening the door for futures to climb off limit-down levels, traders said.

 

Soymeal futures ended higher, bolstered by technical support, strength in feed grain markets and spreading between the soy products, analysts said. The inability of futures to challenge underlying technical support at the US$330.00 level basis May soymeal attracted buyers to boost prices higher, analysts added.

 

May oil share ended at 46.44% and the May crush ended at 65 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses. Speculative funds were estimated buyers of 1,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses. Speculative funds were estimated sellers of 2,000 lots.