April 22, 2008

 

CBOT Soy Review on Monday: Retreats; succumbs to technical led speculative selling

 

 

Chicago Board of Trade soybean futures plunged Monday, succumbing to technically inspired speculative selling in the absence of fresh supportive news to underpin prices, analysts said.

 

May soybeans settled 46 cents lower at US$13.15 1/2, July soybeans finished 46 1/2 cents lower at US$13.30 1/2 and November soybeans ended 45 1/2 cents higher at US$12.35 1/2. July soymeal settled US$10.40 lower at US$341.30 per short tonne. July soyoil finished 202 points lower at 59.72 cents per pound.

 

Overbought market conditions, a lack of fresh news to feed market bulls coupled with spillover from neighboring grains and overnight weakness in Asian markets was a recipe for speculative traders to trim length, analysts said.

 

The market just didn't provide anything new for bullish traders to sink their teeth into, and with outside influences pointing lower, futures quickly retreated to two-week lows before finding underpinning support near the July contract's 100-day moving average, analysts added. July futures briefly slid to exchange imposed 70-cent-lower daily trading limits.

 

Speculative-led selling was featured throughout, with traders pointing to the market's inability to challenge overhead resistance levels last week as a sign of technical weakness, a CBOT trader said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 6,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures tumbled in unison with soybeans, pressured by technical weakness and a lack of fresh supportive news to underpin prices, analysts said. Overnight weakness in Asian markets and the exhaustion of upside technical momentum left futures overbought and vulnerable to liquidation pressure, analysts added.

 

July oil share ended at 46.66% and the July crush ended at 77 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 5,000 lots.