April 26, 2008

 

CBOT Soy Review on Friday: Tumbles on increased acreage prospects

 

 

Chicago Board of Trade soybean futures tumbled Friday on profit-taking and prospects for expanded U.S. plantings, analysts said.

 

July soybeans fell 24 cents to US$13.37 per bushel, and November soybeans tumbled 18 1/2 cents to US$12.22. July soymeal closed down US$4.80 at US$345 per short tonne, and July soyoil fell 122 points to 59.65 cents per pound.

 

Soybeans may gain additional acres from corn as wet weather has prevented growers from putting much corn in the ground, traders said. More moisture is expected in the corn belt after recent thunderstorms, forecasters said.

 

"Near-term planting prospects are over for the western corn belt as heavy t-storms expectedly developed across Nebraska and rolled across much of the western Corn Belt," T-Storm Weather said Friday. In the eastern corn belt, "strong t-storms bring some rain and end planting prospects."

 

The bearish potential for increased plantings dominated bullish near-term concerns about the possibility for a resumption of an Argentine farmers' strike, said Arlan Suderman, analyst for Farm Futures. Farmers have said they would restart their strike if the government doesn't give ground over a controversial export tax on grains.

 

Farmers are negotiating over the tax with the government. If the strike resumes, the U.S. could see extra export business as importers shift purchases away from South America, Suderman said.

 

Still, it's "pretty risky holding a (long) position into the weekend, waiting on a political decision" out of Argentina, Suderman said. "It's hard to sustain a bull market long term when you're talking about a temporary stoppage in trade," he said.

 

Next week, traders will return to watching the weather and also keep a close eye on developments in Argentina, analysts said. The deadline for strike negotiations is May 2.

 

"With the strike deadline coming at the end of next week, it's really going to intensify things," Suderman said.

 

Commodity funds sold an estimated 2,000 contracts. Trading was choppy as it was the last trading day for May options, a trader said.

 

 

Soy Products

 

CBOT soy product futures closed lower with soybeans. Profit-taking and fund selling weighed on the entire soy complex, he said.

 

Commodity funds sold an estimated 2,000 soymeal contracts and 2,000 soyoil contracts. In pit trades, JP Morgan bought 300 May soymeal and sold 400 May soymeal. Tenco bought 900 May soyoil.