April 4, 2007

 

CBOT Soy Review on Tuesday: Lower on speculative selling pressure

 

 

Chicago Board of Trade soybean futures ended sharply lower Tuesday, pressured by speculative selling amid broad-based weakness across commodity markets.

 

May soybeans ended 15 1/4 cents lower at US$7.63 3/4, and November soybeans finished 14 cents lower at US$8.07 1/4. May soymeal settled US$3.80 lower at US$214.50 per short tonne. May soyoil ended 39 points lower at 32.37 cents a pound.

 

The market had gotten a little overbought, and with other markets on the defensive, participants began to take profits heading toward an extended holiday weekend, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The market was also pressured by thoughts that soybean acreage could be higher than Friday's prospective planting estimate, as the recent price appreciation of soybeans to corn and forecasts for a wet, cold start to April in the Midwest could delay corn seedings and create a shift in acres, analysts added.

 

The absence of any fresh supportive news kept the defensive tonnee in place, with consolidative price action featured, as the market failed to break out of the parameters of Monday's wide trading range, analysts added.

 

Commodity wide weakness, with money shifting into less risky equities, created declines in grains, energies and livestock futures, said Mike Zuzolo, senior analyst with Risk Management Commodities Inc. in Lafayette, Ind.

 

Meanwhile, soybeans remain range-bound, having a difficult time challenging the US$8.00-per-bushel level in nearby futures. The switching of demand to South American origins and the get-me-out attitude of speculative longs in corn filtered across the ag complex, making the path of least resistance lower, said Chad Henderson, analyst with Prime Agricultural Consultants in Brookfield, Wisc.

 

The DTN Meteorlogix forecast calls for moisture from rain and snow Tuesday to total up to 3/4 inch across Minnesota, Iowa, Wisconsin, Illinois, Indiana and Ohio. This rain and snow will be followed by temperatures plunging into much-below-normal categories from Tuesday night through Saturday. Soil moisture is already high in the Midwest; the Iowa weekly crop report notes that soil moisture in Iowa is the greatest in almost 10 years, dating back to early April 1998, Meteorlogix reported.

 

In pit trades, buyers and sellers were scattered across various commission houses. Calyon Financial sold 500 November, Shatkin/Arbor sold 400 May, with Speculative fund selling estimated near 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures stumbled lower in unison with soybeans. Consolidative selling was the featured attraction in the products, with both markets trading inside days on technical charts. Soyoil futures' weakness was aided by the defensive influence of lower crude oil futures, with profit taking from recent highs weighing on prices as well, analysts said.

 

Soymeal futures ended lower across the board, succumbing to speculative selling pressure, as the market continues to hover beneath major moving average resistance levels, analysts said.

 

May oil share ended at 43.01% and the May crush ended at 64 1/4 cents.

 

In soyoil trades, speculative fund selling was estimated near 3,000 lots. JP Morgan sold 500 May, and Rosenthal sold 400 May and 200 July.

 

In soymeal trades, Tenco sold 800 May and USA Trading sold 400 May, with Bunge Chicago and Fimat light sellers. Buyers were lightly scattered across various commission houses. Fund selling was estimated near 2,000 lots.