April 9, 2008

 

CBOT Soy Review on Tuesday: End lower; consolidate heading into S/D report

 

 

Chicago Board of Trade soybean futures finished a choppy, two-sided session lower Tuesday, as the market continued to consolidate ahead of Wednesday's supply and demand reports.

 

May soybeans settled 3 1/2 cents lower at US$12.51 1/2; July soybeans finished 3 3/4 cents lower at US$12.68 3/4; and November soybeans ended 9 1/2 cents lower at US$12.05 1/2. May soymeal settled US$0.20 lower at US$329.80 per short tonne. May soyoil finished 13 points lower at 55.84 cents per pound.

 

The market experienced choppy trade, unable to sustain lasting direction, as traders were reluctant to take on added risk amid the uncertainties surrounding potential revisions to the soybean balance sheet following last week's quarterly stocks report, analysts said.

 

The reversal of old/new crop spreads were featured throughout the day, as traders extracted some risk premium from new crop futures amid fears planting delays in corn could lead to increased soy acres, said Mike Zuzolo, analyst with Risk Management Commodities Inc. in Lafayette, Ind.

 

Continued adjustments in the soybean/corn spread ratio was noted, with the November soybean/December corn ratio ending just below 2 to 1, a figure that points to an economic incentive for farmers undecided on some acreage to plant corn, a CBOT floor analyst added.

 

Otherwise activity was subdued, with nearby contracts initially benefiting from a technical recovery from Monday's sharp declines, traders said. However, the inability of futures to attract follow-through buying at overhead resistance on technical charts capped upside movement, while outlooks for higher ending stock projections in Wednesday's report applied pressure, traders 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. The estimates ranged from 120 million to 180 million bushels.

 

Looking ahead, analysts anticipate prices will continue to chop around in a trading range overnight 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. The markets experienced two-sided trade, as traders adjusted positions ahead of Wednesday's supply and demand reports, analysts said. Soyoil futures garnered additional pressure from weakness in energy markets and a firmer U.S. dollar. Soymeal followed soybeans, with spreading between the products lightly featured as well, analysts added.

 

May oil share ended at 45.85% and the May crush ended at 88 1/4 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, with speculative funds net sellers on the day.