March 13, 2008

 

CBOT Soy Review on Wednesday: Mostly lower; technical weakness; old crop loses ground

 

 

Chicago Board of Trade soybean futures ended mixed Wednesday, chopping around in consolidative trade, with old crop futures retreating on technical weakness, analysts said.

 

March soybeans ended 13 1/2 cents lower at US$13.79, May soybeans settled 12 3/4 cents lower at US$13.95, July soybeans finished 13 cents lower at US$14.10 1/2 and November soybeans ended 2 cents higher at US$13.17 1/4. May soymeal settled US$0.30 lower at US$350.50 per short tonne. May soyoil finished 95 points lower at 62.24 cents per pound.

 

Bearish technical signals applied pressure to old crop futures, with ideas a near term top maybe in place and outlooks for a huge Brazilian crop to curtail U.S. export demand attracted profit taking after Tuesdays bounce, said Darrin Newsom, senior analyst with DTN in Omaha, Neb.

 

Last weeks technical reversal from a spike top is raising thoughts that futures are a little overvalued and without fresh supportive news or bullish outside market influences, downside pressure easily consumed prices, he added.

 

Bear spreading was featured during the day, with new crop futures gaining on nearby contracts, as the uncertainty of 2008 acreage intentions in a time when 2008 production will be counted on heavily to replenish tight 2007-08 inventories, kept deferred month futures underpinned, traders said.

 

Otherwise, talk of a large speculative fund liquidation long soybean, short wheat spreads added to the losses with uncertainty surrounding Chinese vegoil policies taking some edge off prices as well, traders added.

 

On tap Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Trade estimates put soybean export sales at 250,000 to 600,000 metric tonnes. Soymeal sales are projected in a range of 25,000 to 75,000 metric tonnes, with soy oil sales expected in a 5,000- to 20,000-tonne range.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil futures retracing most of Tuesdays advances. Soyoil futures dropped over the course of the day, succumbing to speculative selling, as bearish underlying domestic supply and demand outlooks and the uncertainty surrounding Chinas vegoil intentions rekindled profit taking pressure, analysts said. Technical weakness added to the losses, with inability of active contracts to challenge overhead resistance attracted sellers, analysts added.

 

Soymeal futures ended mixed, chopping around in two-sided trade. The absence of fresh news applied pressure, with spillover from the rest of the complex weighing on prices as well, traders said. Nevertheless, spreading between the products as traders attempt to keep spread relationships inline kept a floor under prices, analysts added.

 

May oil share ended at 47.03% and the May crush ended at 60 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.