April 25, 2007

 

CBOT Soy Review on Tuesday: Settles lower on speculative sales, acres talk

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, stumbling to 2 1/2-month lows on speculative sales amid bearish acreage potential and a lack of fresh supportive news, analysts said.

 

July soybeans settled 11 3/4 cents lower at US$7.26 1/4, and November soybeans finished 12 1/2 cents lower at US$7.53 1/4. July soymeal settled US$4.90 lower at US$196.70 per short tonne. July soyoil ended 29 points lower at 32.43 cents a pound.

 

The market found itself dealing with bearish technical momentum, and with corn planting delays spurring thoughts of additional soybean areas, buyers remained on the run, analysts said.

 

Record U.S. and global soybean inventories helped promote weakness in nearby contracts, with traders unwilling to buck the downtrend in the absence of fresh supportive news to attract buyers, traders added.

 

However, oversold market conditions limited some downside movement, but speculative-led selling remained a featured attraction, with declines accelerating when active contracts dropped firmly below recent support levels, an analyst added.

 

Otherwise, corn planting progress dominated attention, with prolonged delays in corn planting seen as negative for soybeans, as the inability to plant corn would likely lead to additional soybean plantings, a CBOT floor analyst said.

 

The DTN Meteorlogix weather forecast calls for rainfall of up to 2 1/2 inches from Tuesday through Friday in all but the northern Midwest. Field work and thoughts of corn planting will be shelved because of the widespread rainfall.

 

Conditions don't offer a wide-open field-work window during the first part of May for the Midwest. Following the rain this week, the six- to 10-day forecast brings in warmer-than-average temperatures and below-average rainfall through Saturday, May 4. However, both the U.S. and European community weather models show a good chance for renewed rainfall in the Corn Belt from Sunday, May 5, through Wednesday, May 9, Meteorlogix reports.

 

In pit trades, buyers and sellers were scattered among various commission houses, with ADM Investor Services selling 500 November, Man Financial selling 300 July and Rand Financial a seller of 400 July. Speculative fund selling was estimated near 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board Tuesday, with speculative selling a featured attraction. Soyoil ended lower but managed to gain some product share at the expense of faltering soymeal futures. The market continued its consolidation of Friday's advances, with borrowed weakness from crude oil futures and soybeans aiding the lower tonnee, traders said.

 

Soymeal futures stumbled to 2 1/2-month lows, succumbing to technical and speculative selling pressure. The absence of fresh supportive news left futures vulnerable to technical weakness, analysts said. The ability of the active July future to extend to 2 1/2-month lows and penetrate support at its 200-day moving average attracted fresh selling pressure to firmly plant prices in negative territory.

 

July oil share ended at 45.19% and the July crush ended at 63 1/4 cents.

 

In soyoil trades, Bunge Chicago bought 500 July and JP Morgan bought 300 May. Rosenthal sold 1,000 December, JP Morgan sold 300 July and 300 December, and Citigroup sold 300 July. Speculative fund selling was estimated between 3,000 and 4,000 lots.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated near 2,000 lots.