CBOT Soy Review on Wednesday: Lower; soyoil pressure, outside weakness

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, backpedaling from early advances on speculative sales attributed to spillover weakness from soyoil and a lack of sustainable support from outside markets.

 

CBOT March soybeans settled 14 cents lower at US$8.75, and May soybeans ended 15 cents lower at US$8.61. November soybeans settled 18 1/2 cents lower at US$8.17.

 

May soy meal settled US$1.80 lower at US$269.50 per short tonne. May soyoil finished 107 points lower at 29.91 cents per pound.

 

Weakness in soyoil served as a catalyst to send prices retreating, with declines in energies, a slide in equities and the inability of futures to attract follow-through buying at session highs sending buyers running for cover, said Joe Victor, analyst with Allendale Inc.

 

Futures initially climbed on a supportive cut in the 2008-09 carryout forecast, with a firmer stock market, and weaker U.S. dollar buoying prices.

 

However, as the day unfolded, outside market support dried up, with stock indexes retreating, and crude oil plunging, taking a supportive arm away from prices.

 

The loss of outside support placed attention back on supply and demand data, Victor said. Despite a lower end stock figure, bothersome soyoil stocks, an uptick in world supplies and higher projected 2009 acreage were bearish features that dampened bullish enthusiasm, Victor added.

 

The theme carried into the close, with technical selling featured, traders said.

 

USDA pegged U.S. soybean ending stocks at 185 million bushels, down 25 million bushels from its estimate in February, and below the average analyst estimate of 200 million bushels. In the supply/demand balance sheet, the government raised its export estimate by 35 million bushels to 1.185 billion bushels while lowering the amount of soybeans it expects to be crushed by 10 million bushels to 1.640 billion bushels.

 

On tap for Thursday, USDA's weekly export sales report will be released at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires estimate soybean sales for the week ended March 5 in a range of 300,000 to 500,000 metric tonnes. Soymeal export sales are seen between 75,000 and 125,000 tonnes, while soyoil sales are pegged between 5,000 and 10,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures finished lower, with soyoil futures the downside leader on bearish stock data. A bothersome rise in 2008-09 domestic soyoil stocks in the USDA's supply and demand report coupled with stumbling crude oil prices uncovered sellers to firmly plant prices in negative territory, said Allendale's Joe Victor.

 

Soybean oil stocks are projected higher due to a sharp reduction in domestic use resulting from lower soybean oil-based biodiesel production, the USDA reported. Soybean oil used for biodiesel was reduced 0.7 billion pounds to 2.2 billion as biodiesel producers face poor margins, reduced export prospects, and strong competition from other feedstocks, the USDA reported.

 

Meanwhile, competition from palm oil is clouding the picture for soyoil consumption, analysts added.

 

Soymeal futures ended lower, retreating in step with the rest of the complex, but managed to gain product share on meal/oil spreading.

 

May oil share ended at 35.69%. The May crush ended at 60 cents.