May 16, 2009

 

CBOT Soy Review on Friday: Stumble on pre-weekend profit taking

 

 

Soybean futures at the Chicago Board of Trade ended lower Friday, succumbing to profit taking pressure in the absence of fresh news.

 

CBOT July soybeans settled 17 cents lower at US$11.30 1/2 and November soybeans finished 16 1/4 cents lower at US$9.75 3/4.

 

July soy meal settled US$4.10 lower at US$358.20 per short tonne. July soyoil finished 94 points lower at 37.90 cents per pound.

 

"The market had produced some pretty good gains for the week, and with fund buying easing in Friday's session, the situation was ideal for pre-weekend profit taking," said John Kleist, broker/analyst with Allendale Inc.

 

A quiet news front left traders with little incentive to push prices in the face of weakness in outside markets, analysts said.

 

The old crop July contract had rallied over US$3.00 or 33% a bushel since March 2, leaving futures a little overbought and due for a minor setback, said Kleist.

 

Nevertheless, the declines were not seen changing the overall bullish make up of the market. Tight availability of old crop supplies, solid export demand and resurgence in the crush is expected to keep prices firmly underpinned, analysts said.

 

Old/new crop bull spreads were stable Friday, but maintained wide differentials.

 

The July/November spread settled at US$1.54 3/4 a bushel, down from Thursday's settlement of US$1.56 1/2 cents.

 

Traders said the market would continue to monitor weather conditions, as wet, cool conditions in the eastern Midwest keep planting progress moving at a well-below-normal pace.

 

DTN Meteorlogix said the Midwest appears mostly dry on Sunday and Monday. That is good for the possibility of field dry down. However, northern areas across the Midwest this weekend will have nighttime temperatures in the 30 degree Fahrenheit range, and highs in general about 5 degrees below normal, especially in the eastern Midwest. Such cool temperatures make drying fields a slow process. Tuesday and Wednesday, light showers are likely in the northern areas of the Midwest, Meteorlogix said.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, stumbling in step with soybeans. Soyoil futures retreated, losing product share on spreads as weakness in world vegoil markets weighed on prices. Soymeal prices dropped as well, pressured by pre-weekend profit taking after the market's recent surge to 8-month highs, analysts said. Nevertheless, solid underlying export demand continued to push meal in the meal/oil spread relationship, analysts added.

 

July oil share ended at 34.63%. The July soybean crush ended at 74 1/2 cents.