April 8, 2008

 

CBOT Soy Review on Monday: Retreats from early gains on profit-taking

 

 

Chicago Board of Trade soybean futures ended lower Monday, backpedaling from earlier gains amid profit-taking on recent advances, analysts said.

 

May soybeans settled 22 cents lower at US$12.55, July soybeans finished 21 1/2 cents lower at US$12.72 1/2 and November soybeans ended 8 3/4 cents lower at US$12.15. May soymeal settled US$3.50 lower at US$329.90 per short tonne. May soyoil finished 64 points lower at 55.97 cents per pound.

 

After a huge bounce from last week's lows, the market was overdue for profit-taking to set in, with traders taking some money to the bank, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

Uncertainty surrounding Wednesday's supply and demand report, with analysts' estimates spread across a wide range, enticed traders to square up some positions as well, Hannagan added.

 

The U.S. Department of Agriculture is scheduled to release its April supply and demand estimates Wednesday at 8:30 a.m. EDT. The average of analysts estimates in a Dow Jones Newswires survey peg 2007-08 soybean ending stocks at 157 million bushels, up from the March estimate of 140 million.

 

Meanwhile, lingering fears that persistent wet conditions in the southern Midwest will delay early corn planting and possibly lead to increased soybean acres applied further pressure to attract sellers, analysts added.

 

The rolling of spreads and positions from the nearby May future was a feature also, as traders began to exit speculative positions as the market moves toward the delivery period at the end of the month, a CBOT floor broker said.

 

Futures initially climbed on technical follow-through buying and spillover support from outside markets, with crude oil, metals and palm oil futures all lending support, traders said. However, after satisfying early upside objectives, speculative buying exhausted and sellers surfaced to send prices tumbling into negative territory heading down the stretch, traders added.

 

Looking ahead, analysts anticipate prices will continue to settle into a trading range consolidating ahead of Wednesday's supply and demand report, analysts said.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures stumbled lower in unison with soybeans. Technical selling and speculative profit taking weighed on prices, with speculative selling surfacing after early buying interest was exhausted, analysts said. Profit-taking sales derailed soyoil's early price strength, overshadowing the spillover effect of firm crude oil and higher overnight values in Malaysian palm oil futures, analysts added.

 

May oil share ended at 45.81% and the May crush ended at 84 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.