March 28, 2008

 

CBOT Soy Review on Thursday: Lower; Argentina news pressures late

 

 

Chicago Board of Trade soybean ended sharply lower Thursday, pressured by news of a possible resolution to the Argentina farmers strike, increased margins, and position squaring heading toward Monday's plantings and stocks reports, analysts said.

 

May soybeans settled 24 3/4 cents lower at US$13.27 1/4, July soybeans finished 23 cents lower at US$13.42 1/2 and November soybeans ended 36 cents lower at US$12.08 1/2. May soymeal settled US$6.70 lower at US$348.80 per short tonne. May soyoil finished 27 points lower at 57.48 cents per pound.

 

The market was pressured late in the day by rumors Argentina farmers and government representatives had scheduled meetings to possibly end the farmer's strike that had stopped movement of agricultural products in Argentina and diverted export business to U.S. origins, said Mike Zuzolo, analyst with Risk Management Commodities in Lafayette, Ind.

 

Looking ahead, the possible solution to the strike in Argentina could lead to some follow-through selling in the overnight session, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

However, if no resolution comes from the meeting, the market could possibly hold Thursday's lows above a chart gap basis May futures as the market consolidates into Monday's key crop reports, Scoville added.

 

Farmers are currently negotiating with government representatives for a temporary halt of roadblocks that have stopped the flow of agricultural goods for the last 15 days, a spokesman from one farm group said Thursday.

 

However, Argentina's farmers will only end a nationwide strike if the government sits down to meaningful negotiations over the export tax on grains, Argentine Agrarian Federation spokesman Rodrigo Miro told Dow Jones Newswires Thursday. The four leading farm groups released a statement Thursday indicating that a halt to the strike is dependent on successful talks.

 

The defensive tonnee carried over from the overnight session, with the exhaustion of speculative fund buying that buoyed prices in previous sessions opening the door for consolidation to occur, analysts added.

 

The strengthening of the U.S. dollar coupled with increased margins placed on CBOT futures enticed participants to reduce risk exposure in the market, as soybeans still carry a lot of speculative longs, Zuzolo added.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures closed lower with soybeans in a setback from recent rallies, traders said.

 

Profit-taking hit the soy complex ahead of the release of the USDA's prospective plantings report on Monday, they added. There are some bearish expectations that U.S. 2008 soy plantings will be larger than expected. An increase in the minimum margin for soyoil took effect Thursday and was seen adding some pressure, a CBOT floor analyst said.

 

May oil share ended at 45.17% and the May crush ended at 72 1/2 cents.

 

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

 

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