March 26, 2009

 

CBOT Soy Review on Wednesday: Beans slide; lacked fresh support

 

 

Chicago Board of Trade soybean futures stumbled as the absence of fresh supportive news took the wind out of bullish sails Wednesday.

 

CBOT May soybeans ended 16 cents lower at US$9.51, and November soybeans settled 16 1/2 cents lower at US$8.80.

 

May soy meal settled US$9.00 lower at US$294.30 per short tonne. May soyoil finished 10 points higher at 33.37 cents per pound.

 

A quiet news front and a lack of fresh supportive demand to keep legs under the market opened the door for a minor setback, with traders booking profits ahead of next week's plantings report, said Chad Henderson, analyst with Prime Ag Consulting.

 

Demand has softened, the Argentina strike has been priced in the market, and with outlooks for a jump in 2009 soy acres, traders looked to trim some risk exposure in the market Henderson added.

 

Mixed signals from outside financial markets kept position evening a feature as the trade had no definitive new inputs to direct prices, analysts said.

 

However, the spreads were active, with old/new crop spreading widening out before late positioning narrowed the spread down the stretch.

 

The traditional old crop/new crop-July/November- spread narrowed to a 66 cent inverse Wednesday, down from Tuesday's 67 1/4 cent inverse.

 

The new crop November future continued to run into a wall near the US$9.00 level on bearish acreage outlooks for the U.S. Department of Agriculture's prospective plantings report, Henderson said.

 

Looking ahead, analysts anticipate a softer tonnee will carry over into the overnight session as traders take a cautious approach until fresh news sparks new interest.

 

In pit trades, speculative fund selling was estimated at 6,000 lots.

 

On tap Thursday, the U.S. Census Bureau is scheduled to release its February crush report at 8 a.m. EDT (1200 GMT). The bureau is expected to estimate the February soybean crush at 134.5 million bushels, down from the previous month on sluggish domestic meal demand.

 

USDA's weekly export sales report will be released at 8:30 a.m. EDT on Thursday. Analysts surveyed by Dow Jones Newswires estimate soybean sales for the week ended March 19 in a range of 250,000 to 550,000 metric tonnes. Soymeal export sales are seen between 75,000 and 125,000 tonnes, while soyoil sales are pegged between 5,000 and 15,000 tonnes.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Wednesday, with soyoil regaining product share on spreads as the meal/oil relationship shifts to soyoil, a cash connected CBOT floor broker said. Traders said underlying demand potential aided soyoil as prices are more competitive in world vegoil markets.

 

Soymeal fell in unison with soybeans, as traders reduced risk in the absence of any fresh Argentina strike news and sluggish domestic demand.

 

In pit trades, speculative fund selling was estimated at 1,000 lots in soymeal.

 

May oil share ended at 36.18%. The May crush ended at 63 1/2 cents.