May 8, 2009

 

CBOT Soy Review on Thursday: Backpedals on speculative sales, China rumors

 

 

Chicago Board of Trade soybean futures ended lower Thursday, backpedaling from initial advances on speculative selling and talk of China canceling purchases of soybeans.

 

CBOT May soybeans ended 16 cents lower at US$11.19 a bushel, July soybeans settled 16 cents lower at US$11.02 and November soybeans finished 6 cents lower at US$9.72.

 

July soy meal settled US$3.30 lower at US$341.70 per short tonne. July soyoil finished 20 points lower at 38.78 cents per pound.

 

There were rumors China canceled 300,000 metric tonnes of old crop purchases and shifted 500,000 tonnes of purchases to the next marketing year, a CBOT floor analyst said.

 

The China talk attracted speculative sales, with weaker longs covering positions, particularly after futures had recently rallied to seven-month highs in attempt to ration the consumption of old-crop inventories, analysts said.

 

Futures initially climbed to new highs for the current uptrend, buoyed by strong demand, declining South American crop outlooks and supportive outside markets. However, the absence of follow-through buying at the highs sparked mild profit-taking pressure until the China rumors uncovered aggressive sales.

 

Nevertheless, futures remain underpinned by bullish fundamentals, and traders expect prices will only consolidate in the face of tight supplies, analysts said.

 

Profit-taking in the July/November spread dropped the spread US$1.30 a bushel, down from Wednesday's settlement of US$1.40.

 

Looking ahead, a technical analyst said market bulls have gained solid upside technical momentum recently and are looking for more on the upside in the near term. With soybean prices climbing above US$11.00 a bushel recently, it also signals to traders that daily price moves are likely to become larger - both on the upside and on the downside - as the price uptrend continues, he added.

 

Meanwhile, sources at Argentina's Agriculture Secretariat expect the 2008-09 soy crop to total a dismal 33 million metric tonnes, according to a report Thursday in local daily Clarin. Officials responsible for managing the Secretariat's crop forecasts couldn't be reached for comment.

 

 

SOY PRODUCTS

 

Soy product futures settled lower, stumbling in step with declines in soybeans. The weakness of soybeans spillover over into the products, putting prices on the defensive, with soyoil also pressured by a setback in crude oil, analysts said. However, solid underlying export demand for both soymeal and soyoil limited declines, traders added.

 

July oil share ended at 36.23%. The July soybean crush ended at 76 1/4 cents.