April 25, 2008

 

CBOT Soy Review on Thursday: Retreat; speculative sales, technicals, outside markets

 

 

Soybean futures prices stumbled lower Thursday on the Chicago Board of Trade, backpedaling on speculative sales attributed to technical pressure and the bearish influence of outside markets.

 

May soybeans settled 23 1/4 cents lower at US$13.48 3/4, July soybeans finished 24 1/2 cents lower at US$13.61 and November soybeans ended 17 1/2 cents lower at US$12.40 1/2. July soymeal settled US$6.20 lower at US$349.80 per short tonne. July soyoil finished 109 points lower at 60.87 cents per pound.

 

The outside markets were decidedly lower Thursday, and with a few things on the negative side of the ledger speculative money began to flow out of the market, said John Kleist, broker/analyst with Allendale Inc. in McHenry Ill.

 

The export sales report only showed light purchases from China; Census crush data was below trade estimates, and Asian markets were lower overnight, opening the door for the losses, Kleist added.

 

Traders continue to monitor outside markets, with strength in the U.S. dollar and retreating crude oil and precious metal futures generating broad-based sales across commodities, analysts said.

 

Technical selling played a key role in the session's losses also, with the penetration of key moving average support levels igniting pre-placed sell orders to accelerate the declines, said Mike Zuzolo, analyst with Risk Management Commodities in Lafayette, Ind.

 

Nevertheless, traders said the market remains in a sideways trading pattern, wedged in a wide trading range of the last 2 1/2 weeks. Volatile consolidative action is the near term theme, as market bulls and bears struggle to establish a near term technical advantage, analysts added.

 

However, lingering uncertainties surrounding the possible resumption of the Argentine farmer's strike next week remains a supportive feature, but rumors the Argentina government was looking at temporarily lowering or suspending its export tax on soybeans weakened its supportive impact, Kleist said.

 

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

 

 

SOY PRODUCTS

 

Soy product futures prices finished with sharp declines, tumbling in unison with soybeans. Broad based commodity weakness attracted speculative sales, with technical pressure helping accelerate the losses as well, analysts said. Soyoil futures prices were influenced by a drop in crude oil and overnight declines in Asian vegoils markets, which offset support from supportive Census stocks and weekly export sales data, analysts added. Soymeal futures prices garnered additional weakness from bearish stock data from the Census Bureau and technically inspired sales, traders said.

 

July oil share ended at 46.53% and the July crush ended at 78 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 buying estimated at 3,000 lots.