May 23, 2008

 

CBOT Soy Review On Thursday: Stumbles on speculative sales, crude oil losses

 

 

Chicago Board of Trade soybean futures stumbled Thursday, succumbing to speculative profit taking amid spillover pressure from a setback in crude oil prices and technically motivated selling.

 

July soybeans settled 24 1/4 cents lower at US$13.24 3/4 and November soybeans ended 30 3/4 cents lower at US$13.24 1/4. July soymeal settled US$4.50 lower at US$328.00 per short tonne. July soyoil finished 142 points lower at 61.83 cents per pound.

 

Profit taking from Wednesday's strong gains was featured, precipitated by a slide in crude oil prices and a lack of any definitive bullish news to extend earlier advances, said John Kleist, broker/analyst at Allendale Inc. in McHenry, Ill.

 

Active old/new crop spreading enabled nearby contracts to gain on deferred month futures, with supportive weekly export sales and monthly Census crush data providing light underlying support, analysts said.

 

Technical trading played a key role in the day's movement, with the ability of nearby contracts to challenge support at major moving averages accelerating downside moves, traders said.

 

Nevertheless, futures remained in a sideways mode, as there is currently no definitive news to break prices out of a sideways pattern, and that is why crude oil influences the market as much as it does, Kleist added.

 

Traders continue to take a cautious approach to the market amid the uncertainties surrounding unresolved Argentine strike issues and 2008 U.S. soybean acreage, analysts added.

 

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

 

 

SOY PRODUCTS

 

Soy product futures backpedaled, with soyoil succumbing to speculative sales on spillover pressure from a drop in crude oil prices, analysts said. "Crude oil led the market higher, so it's only natural it would drag it lower," a CBOT floor broker said. A higher-than-anticipated stock figure in the Census crush report provided additional pressure to weigh on soyoil despite supportive weekly export sales, traders said.

 

Soymeal futures ended lower, in step with the rest of the complex. The market managed to recover some product share amid some adjustments in the oil/meal spread relationship, with supportive export data limiting losses as well, traders said. However, technical sales helped keep prices pinned in negative territory, as the inability of the active July future to challenge overhead resistance uncovered fresh selling interest, traders added.

 

July oil share ended at 48.52% and the July crush ended at 77 cents.

 

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

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.