April 7, 2004

CBOT Soy Review On Tuesday: Complex Slips Further In More Spec Selling
 
Soybean futures at the Chicago Board of Trade settled lower Tuesday in another technical day of speculative selling in a market void of fresh fundamental news.
 
Brokers on the trading floor said profit taking and positioning ahead of Thursday's U.S. Department of Agriculture supply and demand report were the main influences behind the selling activity for the day. Technical selling was also triggered when prices breached the 20-day moving average of $10.06 1/2 basis May earlier in the session, sources said.
 
By the end of the day, the May contract posted an 18-cent trading range.
 
"If you're not trading a 30-cent day, nothing's going on," one broker said.
 
May soybeans settled 15 1/2 cents lower at $10.09 a bushel, and Jly beans were 16 1/2c lower at $10.06 1/2 a bushel. May soymeal finished $4.70 lower at $321.80 a short ton, and May soyoil ended 33 points lower at 32.41c a pound.
 
Sid Love of Kropf & Love Consulting in Overland Park, Kan., said technical liquidation was the theme across the complex. "Everybody is so long, we need to lighten up a little bit," he said. "Huge longs make you nervous and the market more volatile."
 
The key reversal left on the soybean and soymeal charts after Monday's sell-off was the bearish technical indicator that assured market participants of a down day. And with no fresh fundamental news to direct the market in a clear direction, prices were left at the mercy of speculative sellers.
 
And with the USDA's April supply and demand report scheduled to be released on Thursday, floor sources said the positioning in preparation for the report could have also been a technical depressant.
 
Meanwhile in the cash market, soybean premiums deteriorated another 1c Tuesday, falling to 28c over the CBOT May contract for April delivery. The current basis is also 6c lower than one week ago.
 
Featured CBOT soybean buyers were Cargill with 100 May and 300 Jly, Carr Futures with 500 May, Fimat with 200 Jly, Prudential Securities with 200 May, and Refco with 300 Jly.
 
Major sellers were FCStone with 200 Jly, Produce Grain with 300 Jly, ABN AMRO with 200 May, Man Financial with 200 May and 500 Jly, and R.J. O'Brien with 200 May and 300 Jly.
 
Archer Daniels Midland spread 500 Nov/May and 500 Nov/Jly, Fimat spread 1,000 Jly/May, and Shatkin Arbor Karlov spread 700 Jly/May.
 
SOY PRODUCTS
 
By the close, soybean futures had a slight lead to the downside in front of soymeal and soyoil, taking the place soyoil held earlier in the session. Soyoil futures on the May contract even closed below the 50-day moving average of 32.43c basis the May, which had not been done since Aug. 28, 2003.
 
May soymeal closed at a loss of 1.45% in value, while May soyoil deteriorated 1.01%. May oil share rose to 33.49%, and May crush rose to 55 1/2c.
 
In soymeal trades, Cargill bought 400 May and 200 Jly, Produce Grain bought 300 May, DT Trading bought 300 May, and Prudential Securities bought 200 May. Archer Daniels Midland sold 400 May, 100 Sep, 100 Oct and 100 Dec, Cargill Investor Services sold 300 May, 100 Jly, 300 Sep, and 100 Dec, Iowa Grain sold 200 Jly, Man Financial sold 100 May, 300 Jly, and 100 Aug, and Refco sold 100 May and 200 Jly.
 
In soyoil, Archer Daniels Midland bought 300 May and 300 Jly, Cargill bought 200 May, Produce Grain bought 200 May and 100 Jly, ABN AMRO bought 300 May and 100 Jly, Rand Financial bought 100 May and 100 Jly, Citigroup Global Markets bought 100 May and 400 Jly, and Tenco  bought 300 May and 300 Jly. Carr Futures sold 300 May, Cargill Investor Services sold 300 May and 100 Jly, Fimat sold 600 May, Goldenberg Hehmeyer sold 200 May, Man Financial sold 700 Jly and 600 May, Prudential Securities sold 200 May, R.J. O'Brien sold 200 May, Refco sold 200 May, Shatkin Arbor Karlov sold 200 May, and TradeLink sold 100 May and 100 Jly.