April 30, 2008

 

CBOT Soy Review on Tuesday: Mixed; nearbys retreat; technicals, strike talk

 

 

Soybean futures ended mixed on the Chicago Board of Trade Tuesday, with nearby contracts down on a combination of technical weakness, outside market influences and concerns Argentine farmers will extend their strike truce.

 

May soybeans settled 4 cents lower at US$12.79 1/2, July soybeans finished 4 cents lower at US$12.93 1/2 and November soybeans ended 4 cents higher at US$12.00 1/2. July soymeal settled US$2.50 lower at US$333.00 per short tonne. July soyoil finished 66 points lower at 57.82 cents per pound.

 

Nearby contracts were subjected to another round of selling pressure, as traders continued to reduce risk exposure amid the uncertainty of the Argentine strike, a sell-off in outside inflationary markets and technical pressure, analysts said.

 

New-crop futures ended higher, bouncing on adjustments in the corn/soy and old-/new-crop soybean spread relationships, analysts added. Talk of some forecasters reporting a possible open window for planting next week aided deferred contracts, traders said.

 

The December corn/November soy spread ratio had slipped below 2 to 1, providing an economic incentive for farmers not to switch corn acres to soybeans despite slow corn planting progress, and that elicited a price response from soybeans, a CBOT floor analyst said.

 

Consolidative activity was featured, with active contracts unable to break out of Monday's trading ranges, traders said.

 

Meanwhile, deliveries against the CBOT May soybean and soymeal contracts on first notice day Wednesday are expected to remain light, while soyoil notices have the potential to be large, analysts said.

 

Analysts expect deliveries against the CBOT May soybean contract to fall in a range of zero to 1,000 lots, with most analysts leaning toward a range of zero to 500 lots. Soyoil delivery notices are expected in a range of 1,000 to 4,000 contracts, while soymeal deliveries are seen between zero and 1,000 lots. As of 5 p.m. EDT Monday, 1,908 soybean contracts, 12,836 soyoil contracts and 1,676 soymeal contracts were registered for delivery at CBOT-approved warehouses.

 

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

 

 

SOY PRODUCTS

 

Soy product futures ended mostly lower, as the bearish psychology associated with Argentina's strike uncertainty, technical pressure and spillover weakness from outside market influences kept a defensive tonnee in the market, analysts said. Overnight weakness in Asian vegoil markets and a sharp slide in crude oil futures added pressure for soyoil futures, traders said. Soymeal followed the complex lower, but deferred contracts edged higher on spread relationships, analysts added.

 

July oil share ended at 46.47% and the July crush ended at 74 cents.

 

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

 

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