March 29, 2008

 

CBOT Soy Review on Friday: Plunge; positioning ahead of plantings report

 

 

Chicago Board of Trade soybean futures plunged Friday, falling on nervous selling ahead of Monday's key planting intentions report and end-of-month and -quarter position squaring.

 

May soybeans settled 60 cents lower at US$12.67 1/4, July soybeans finished 57 1/2 cents lower at US$12.85 and November soybeans ended 49 cents lower at US$11.59 1/2. May soymeal settled US$6.50 lower at US$342.30 per short tonne. May soyoil finished 250 points lower at 54.98 cents per pound.

 

Outlooks for a significant increase in 2008 soybean planted acreage set the stage for the day's declines, as traders looked to trim their risk exposure heading into Monday's reports, analysts said.

 

The U.S. Department of Agriculture is scheduled to release its 2008 U.S. prospective planting and quarterly grain stocks report Monday at 8:30 a.m. EDT.

 

A Dow Jones Newswires survey of 22 analysts saw a range of forecasts between 70.0 million and 74.2 million acres, putting the average at 71.5 million. These are all up from the 2007 soybean seedings of 63.6 million acres.

 

Rumors of Argentina's 16-day farmers strike nearing an end as farm groups and government representatives begin to negotiate a solution to the conflict added pressure to prices, analysts added.

 

An end to the strike would allow for the movement of Argentina Ag products and cut demand that was diverted to the U.S. after the strike stalled Argentina's exports, traders said.

 

Meanwhile, a firmer U.S. dollar in conjunction with lower crude oil and metal futures attracted selling pressure, with technical weakness featured, as prices gapped below near-term chart support levels, a trader said.

 

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

 

 

SOY PRODUCTS

 

Soyoil futures tumbled Friday, falling to their new 250-point-lower daily trading limits. The combination of weak outside market influences, month end positioning and a sizable upward revision to January and February stock estimates by the Census Bureau opened the door for the losses, analysts said. The market continues to maintain a large speculative long position, and with uncertainty ahead of a major report traders were content to reduce risk exposure, analysts added.

 

The U.S. Census Bureau upwardly revised its February soyoil stocks data Friday, pegging stocks at 3.101 billion pounds. This is up from the 2.681 billion estimate reported Thursday. The January 2008 stocks figure was upwardly revised as well to 3.234 billion pounds, up from 3.061 billion reported Thursday.

 

Soymeal futures ended lower, swept away by the liquidation theme filtering through the complex, analysts said. However, futures continued to gain product share, as adjustments in the meal/oil spread relationship, unwinding of oil/meal spreads and outlooks for strong world feed demand limited meal's losses, analysts added.

 

May oil share ended at 44.54% and the May crush ended at 90 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 2,000 lots and commercial buying pegged at 1,000 lots.