May 7, 2008

 

CBOT Soy Review on Tuesday: Mostly lower; stumbles late on strike talk

 

 

Chicago Board of Trade soybean futures ended mostly lower Tuesday, stumbling late on selling pressure associated with the Argentina strike, and exhaustion of early speculative fund buying.

 

May soybeans settled 8 1/2 cents lower at US$12.64 1/2, July soybeans finished 9 cents lower at US$12.77 and November soybeans ended 2 cents higher at US$12.17 1/2. July soymeal settled US$3.20 lower at US$327.80 per short tonne. July soyoil finished 47 points higher at 57.84 cents per pound.

 

Talk of a potential announcement Tuesday afternoon on the outcome of Argentine government and farmer groups' negotiations on a strike sent prices spiraling from early highs in late dealings amid reports the talks were progressing well, analysts said.

 

The market overdid it to the upside, following an early spike higher move, and once fund buying dried up, futures retraced their gains and sank into negative territory down the stretch, said Vic Lespinasse, analyst with grainanalyst.com.

 

Nervousness associated with the Argentina strike allowed futures to divorce from the bullish theme in other commodity markets, analysts said. Farm groups and the government are making last-ditch efforts Tuesday to avert farmers stepping up the strike to the levels seen in March that crippled grain movement in the country and diverted export business to U.S. origins, analysts added.

 

Futures initially soared to one-week highs, feeding off spillover support from record high crude oil prices and weakness in the U.S. dollar, as speculative money flowed into commodities in general, said Dale Durchholz, analyst with Agrivisor in Bloomingtonne, Ill.

 

The influence of outside markets served as a bullish catalyst. But with traders holding their breath ahead of news on Argentina, the uncertainties of the strike and 2008 plantings encouraged traders to reduce their risk exposure, traders said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal retreating from early highs in unison with a late drop in soybean futures, analysts said. Soyoil futures ended higher, but well off earlier highs. The market drifted from its highs in tune with soybeans, but with crude oil rising to record highs, soyoil was able to remain in positive territory, with oil/meal spreading featured as well, traders said.

 

July oil share ended at 46.87% and the July crush ended at 80 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,000 lots.

 

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