May 6, 2009

 

CBOT Soy Review on Tuesday: Stumbles; market consolidates in choppy trade

 

 

Most soybean futures contracts at the Chicago Board of Trade ended lower Tuesday, stumbling on profit-taking following the market's bullish run to seven-month highs in recent weeks.

 

CBOT May soybeans ended 3/4 cent higher at US$11.16, July soybeans settled 2 1/2 cents lower at US$11.01 and November soybeans finished 10 cents lower at US$9.60 1/2.

 

July soy meal settled US$0.20 higher at US$345.00 per short tonne. July soyoil finished 25 points lower at 37.99 cents per pound.

 

The absence of fresh news to keep buyers enthused opened the door for profit-taking as the market consolidated in a choppy two-sided day of activity, analysts said.

 

Despite Tuesday's setback, nearby contracts remained firmly underpinned, feeding off strong Chinese demand, tight old-crop stocks and declining Argentina soy production estimates, said Joe Victor, an analyst with Allendale Inc.

 

New crop contracts, representing crops that will be harvested in the fall, lost ground to nearby contracts on bull spreads for the fifth consecutive trading day.

 

The July/November spread widened to US$1.40 1/2 a bushel, up from Friday's settlement of US$1.33.

 

Weather forecasts pointing to more cooperative weather for spring plantings weighed on new crop futures, said Victor. Corn plantings in the western Midwest are wrapping up, opening the door for a swift start to soybean plantings in the west, he said.

 

The DTN Ag Weather forecast for the Midwest calls for generally dry and warmer weather during the next few days. This trend will favor recently planted crops and allow for some drying of wet fields. However, the outlook for next week calls for unsettled and cooler weather, which will slow down crop development and produce a new round of planting delays.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed. Soyoil futures stumbled on corrective sales from prior gains. Weighing on soyoil were adjustments in the meal/oil spread relationship, weakness from crude oil futures and bearish outlooks for soyoil demand for biodiesel following the Environmental Protection Agency's proposal for implementing a new U.S. renewable fuel standard, analysts said.

 

Soymeal futures were mixed, with nearby contracts managing to hold onto light gains on tight nearby inventories.

 

July oil share ended at 35.55%. The July soybean crush ended at 76 cents.