March 27, 2009

 

CBOT Soy Review on Thursday: Mostly lower in cautious two-sided trade

 

 

Soybean futures on the Chicago Board of Trade ended mostly lower Thursday, stumbling after testing both sides of unchanged levels, as traders took a cautious approach to avoid risk.

 

CBOT May soybeans ended 7 cents lower at US$9.44, and November soybeans settled 1/2 cent higher at US$8.80 1/2.

 

May soy meal settled US$3.50 lower at US$290.80 per short tonne. May soyoil finished 23 points higher at 33.60 cents per pound.

 

The market consolidated in a recent range, holding above major moving- average support on technical charts.

 

Traders had to deal with the balancing act between bulls and the bears for most of the day, as traders had to digest both supportive and negative news, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

Broad-based buying underpinned prices, with speculative buyers emerging in early trade on optimistic outlooks for economic growth amid rising equities. The strength in stock indexes uncovered support across commodities, with bullish weekly export sales and higher-than-expected crush data providing fundamental support to prices, Hannagan said.

 

However, the inability of futures to find follow-through buying at the highs coupled with fears next weeks plantings report could reveal record soybean acreage projections attracted sellers to drag nearby prices into negative territory, traders said.

 

The declines were limited by underlying support from talk of fresh demand arising from the Argentina farmers strike.

 

Argentina is third-largest producer of soybeans and world leader in soy-product exports.

 

Profit-taking on old/new crop spreads helped tighten spread differentials, as deferred contracts gained at the expense of nearby futures.

 

Analysts expect futures to maintain a choppy tonnee heading into the weekend as traders look to limit risk ahead of the prospective plantings report.

 

In pit trades, speculative fund selling was estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil climbing on the realignment of meal/oil spreads. The market is adjusting to the seasonal trend in the meal/oil relationship, with a pickup in export demand helping soyoil garner product share, said Tim Hannagan.

 

Soymeal drifted lower in unison with soybeans, garnering pressure from the reversal of meal/oil spreads as meal demand seasonally slows moving from winter to spring. Higher-than-expected crush data raised fears of building meal supplies amid sluggish domestic demand, traders said.

 

In pit trades, speculative fund selling was estimated at 1,000 lots in soymeal, while fund buying was estimated at 2,000 lots in soyoil.

 

May oil share ended at 36.62%. The May crush ended at 65 1/4 cents.

 

The U.S. Department of Agriculture reported weekly export sales for 2008-09 soyoil at 48,600 tonnes - a marketing-year high - and announced private exporters reported the sale of 35,000 metric tonnes of soyoil to India in the 2008-09 marketing year.