May 20, 2008

 

CBOT Soy Review on Monday: Lower; Argentine strike talk, plantings,Technicals

 

 

Chicago Board of Trade soybean futures ended sharply lower Monday, tumbling on bearish talk surrounding the Argentina farmers' strike, technical weakness and favorable planting outlooks.

 

July soybeans settled 45 cents lower at US$13.33 and November soybeans ended 27 1/4 cents lower at US$13.22. July soymeal settled US$11.20 lower at US$338.80 per short tonne. July soyoil finished 165 points lower at 60.20 cents per pound.

 

Optimism in regard to the Argentina strike situation amid conciliatory statements from Argentine farm groups weighed on soybeans throughout the day, said Vic Lespinasse, analyst with grainanalyst.com.

 

Reports of Argentine farm groups looking to making moves to that could improve the chances of ending the rift between the government and farmers was seen as bearish for near-term U.S. export demand and enticed traders to extract risk premium from prices, analysts said.

 

Technically inspired selling aided the lower theme, with the ability of the nearby July contract to breach underlying major-moving-average support uncovering pre-placed sell orders, traders said.

 

New-crop futures managed to hold above key support levels but posted sizable declines as well, as improved weather forecasts for Midwest plantings points to rapid seedings that could get the U.S. soybean crop sown in a timely fashion, a CBOT floor broker.

 

Otherwise, activity was relatively slow after the initial break in prices, with traders expecting the market to continue to experience wide, volatile price swings until more clarity is provided on 2008 plantings and the Argentina strike issue, traders added.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT. Analysts surveyed by Dow Jones Newswires anticipate soybean plantings as of Sunday to fall within a range of 25% to 35% complete.

 

 

SOY PRODUCTS

 

Soy product futures plunged lower in step with losses in soybeans, trimming premium from prices on ideas a possible resolution in the Argentina strike would curtail U.S. export demand, analysts said. The products gapped lower on technical charts, with soymeal gapping below major moving-average support, traders said. Soyoil followed a similar path to soymeal, but its ability to not violate any key technical support levels coupled with a lack of clear direction from crude oil futures enabled soyoil to gain product share despite sharp declines, traders added.

 

July oil share ended at 47.05% and the July crush ended at 74 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.