March 31, 2009

 

CBOT Soy Review on Monday: Lower; econ woes, void of fresh support

 

 

Soybean futures on the Chicago Board of Trade settled lower Monday, succumbing to selling pressure associated with economic woes and a lack of fresh supportive news.

 

CBOT May soybeans ended 12 1/2 cents lower at US$9.04 1/2, and November soybeans settled 18 3/4 cents lower at US$8.42.

 

May soy meal settled US$2.30 lower at US$281.50 per short tonne. May soyoil finished 38 points lower at 32.04 cents per pound.

 

The uncertainty of the economy kept buyers on the defensive, with sharply lower equities, weakness in crude oil and strength in the U.S. dollar serving as the catalysts for the declines.

 

The Dow Jones Industrial average tumbled more than 300 points during the grain market trading session and crude oil dropped more than US$3 a barrel, below the US$50 a barrel level.

 

Outlooks for a bearish acreage projection in Tuesday's prospective planting report, and the ending of the Argentina farmers strike Friday provided additional pressure to keep futures pinned in negative territory, said John Kleist, broker/analyst with Allendale Inc.

 

"The market had all the ingredients for the continuation of a down trend, with carryover weakness from Friday's slide below major moving averages on technical charts attracting long liquidation," Kleist said.

 

Otherwise, a quiet news front provided little incentive for buyers to come off the sidelines, with traders unwilling to take on added risk ahead of Tuesday's crop reports.

 

Looking ahead, analysts anticipate a cautious evening of trade, with traders eyeing outside markets while awaiting Tuesday's plantings and stocks reports.

 

The U.S. Department of Agriculture is scheduled to release its prospective planting and quarterly grain stock reports Tuesday 8:30 a.m. EDT (12:30 GMT). The reports are expected to show an increase in soybean seedings from 2008, with soybean stocks as of March 1 projected to reveal solid second quarter usage.

 

The average of 17 analysts surveyed by Dow Jones Newswires estimate soybean acreage at 79.251 million acres, up 3.533 million acres from 2008 seeded acreage of 75.718 million. USDA is expected to report soybean stocks at 1.322 billion bushels in its quarterly Grain Stocks report.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, stumbling in unison with soybeans. The combination of economic worries, technical pressure and a lack of fresh supportive news kept prices pinned in negative territory. Soyoil futures lost ground to meal on spreads, as traders even positions ahead of Tuesday's USDA reports, analysts said.

 

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

 

May oil share ended at 36.27%. The May crush ended at 67 1/4 cents.