March 24, 2010

 

CBOT Soy Review on Tuesday: Lower; retreats from earlier gains

 

 

Soy futures at the Chicago Board of Trade settled lower Tuesday, retreating from earlier gains on end-of-the-day position squaring.

 

Nearby CBOT May soy, which is also the most-active contract, settled 1/2 cent, or 0.05%, lower at US$9.68 per bushel.

 

The evening of positions heading toward next week's planting and stocks report promoted a choppy atmosphere, with sellers emerging down the stretch after early buying was exhausted, said Tim Hannagan, analyst with P.F.G. Best in Chicago.

 

Two-sided trade was featured, with early strength seen from market shorts balancing positions, as they reduce risk exposure ahead of a key report that will shape near-term fundamental direction, Hannagan said.

 

Fundamental news was thin and outside markets hardly provided any support. Wet weather in parts of Brazil, slow movement of cash supplies in Brazil and Argentina and a fresh new crop export sale of 120,000 tonnes to unknown destinations supplied some bullish enthusiasm for nearby contracts, traders said.

 

However, a lack of old crop export demand, a record South American harvest and a firmer U.S. dollar provided pressure to cap upside movement.

 

Despite the lower finish, bullish technical traders were encouraged that the most active May futures managed to hold above major moving average support. Bull spreading was featured once again, as outlooks for increased 2010 U.S. soy acres compared to tight old crop stocks weighed on deferred month contracts.

 

Speculative funds were estimated sellers of 2,000 lots in soy, and 1,000 lots in soyoil. Fund buying was estimated at 1,000 lots in soymeal. Fund activity is a measure of investment money flow in the market.

 

 

Soy Products

 

Soy product futures ended mixed, with nearby soymeal rising on adjustments in the meal/oil spread relationship. Firm cash meal prices and supportive technicals helped meal climb to new one-month highs before profit-taking surfaced, analysts said. Soyoil ended lower, backpedaling off initial highs on mixed signals from outside markets and meal/oil spreading, traders said.

 

May soymeal ended US$0.50, or 0.18%, higher at US$271.90 per short tonne, while May soyoil settled 18 points, or 0.45%, lower at 39.54.

 

May oil share was 42.19% while the May soy crush ended at 65 cents.