April 7, 2009

 

CBOT Soy Review on Monday: Retreat on profit taking, outside markets

 

 

Soybean futures on the Chicago Board of Trade settled lower Monday, backpedaling on profit taking pressure and the bearish influence of outside markets.

 

CBOT May soybeans ended 1 1/2 cents lower at US$9.94, and November soybeans settled 11 1/4 cents lower at US$9.12.

 

May soy meal settled US$0.40 higher at US$306.40 per short tonne. May soyoil finished 33 points lower at 34.99 cents per pound.

 

The inability of nearby contracts to hold support above the US$10 per bushel level attracted speculative profit taking, with weakness in equities and crude oil dampening the momentum that carried futures higher overnight, said a CBOT floor analyst.

 

Hedge-related selling and ideas recent gains were overdone in the face of outside pressure helped pin prices lower after a choppy, two-sided start. Cold, wet weather conditions across the central U.S. weighed on deferred new crop contract months, as traders remained concerned that any planting delays for corn could lead to additional soybean acres, analysts said.

 

The DTN Meteorlogix weather forecast calls for generally wet and cold conditions through this week in the Midwest. Precipitation will range up to 2 inches in Illinois and Indiana. The wet conditions and cold temperatures may keep field work slow early this week. Wet conditions also threaten to keep field work slow later in the week, Meteorlogix said.

 

The July/November bull spread was featured once again, with the inverse differential widening out as diverging old and new crop fundamentals buoyed the front end of the market.

 

July/November soybean spread settled at an 81 1/2 cent inverse, up from Friday's close of 72 cents.

 

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

 

Looking ahead, the market remains underpinned by bullish fundamental outlooks, as the trade remains concerned about tightening old crop stocks in the face of strong exports and declining Argentina crop production forecasts, a cash connected CBOT broker said.

 

U.S. Department of Agriculture is scheduled to release its monthly revision to supply and demand balance sheets Thursday 8:30 a.m. EDT.

 

The average of 14 analyst estimates surveyed by Dow Jones Newswires projects 2008-09 U.S. soybean ending stocks at 169 million bushels. The averages ranged from 101 million to 185 million bushels. In March, USDA projected the 2008-09 carryout at 185 million bushels.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal gaining product share on spreads. Soyoil futures stumbled lower, succumbing to the realignment of meal/oil spreads and weakness in crude oil futures. Speculative selling was featured in otherwise quiet action in soyoil, as the market consolidated after setting nearly 3-month highs.

 

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

 

May oil share ended at 36.33%. The May soybean crush ended at 65 cents.