May 28, 2008

 

CBOT Soy Review on Tuesday: Stumbles; outside market influences pressure

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, retreating from prior gains on the bearish influences of outside inflationary markets, analysts said.

 

July soybeans settled 20 1/4 cents lower at US$13.47 3/4 and November soybeans ended 12 1/4 cents lower at US$13.41 1/4. July soymeal settled US$1.60 lower at US$335.00 per short tonne. July soyoil finished 136 points lower at 62.20 cents per pound.

 

A slide in crude oil and metal futures in conjunction with a firmer U.S. dollar set the stage for a profit-taking setback, analysts added.

 

The movement of outside markets was negative for soybeans, with fear that the market could experience end-of-month profit-taking amid general weakness across commodities Tuesday serving as a dominant influence on prices, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The hard nose approach by the Argentine government in its dispute with farm groups provided underlying support, but the impact was muted by ideas the news was factored into prices overnight, and the strong influence of crude oil futures on soybeans and soyoil, traders said.

 

The Argentine government canceled renewed negotiations slated for Monday night with Argentine farm leaders upset with grain export taxes, Interior Minister Alberto Fernandez said.

 

Meanwhile, some private weather forecasts pointing to warmer and drier Midwest conditions at the end of the week into next week favoring rapid planting and emergence, provided some underlying pressure as well, Hannagan added.

 

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 50% to 60% complete.

 

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

 

 

SOY PRODUCTS

 

Soy product futures backpedaled in unison with soybeans. Soyoil futures were the downside leader of the products, succumbing to profit-taking amid spillover pressure from crude oil futures, analysts said. The market rallied in step with crude oil last week, so its justified for prices to slip back once crude oil retreated from last week's advances, analysts added.

 

Soymeal drifted lower in unison with the rest of the soy complex, but the combination of oil/meal spread unwinding and supportive demand outlooks served as buffers to limit downside potential, traders said.

 

July oil share ended at 48.14% and the July crush ended at 73 1/2 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 2,000 lots.