May 28, 2009

 

CBOT Soy Review on Wednesday: End well off highs on profit-taking

 

 

Soybean futures at the Chicago Board of Trade ended higher Wednesday, but well off earlier highs, succumbing to profit-taking pressure.

 

CBOT July soybeans settled 1 1/2 cents higher at US$11.87 and November soybeans finished 7 1/2 cents higher at US$10.50 1/2.

 

July soy meal settled US$3.80 lower at US$386.20 per short tonne. July soyoil finished 6 points higher at 37.81 cents per pound. In pit trades, speculative fund buying was estimated at 3,000 lots in soybeans, while selling was estimated at 1,000 lots in soymeal.

 

The market experienced a modest correction from an early push to a new 8-month high and high for the 2009 calendar year.

 

"Big profit-taking was absorbed after the most active July future achieved an upside objective of challenging resistance at the psychological US$12.00 per bushel level," said Dan Cekander, analyst with Newedge in Chicago.

 

After failing to attract buyers once July beans touched the US$12.00 level, technical selling and the unwinding of the July/November bull spread emerged as a featured attraction.

 

The front months were pressured by a slowing of buyer interest at higher levels, with traders taking a step back on fears high prices could ease consumption demand, said Mario Balletto, analyst with Citigroup in Chicago.

 

The inability of the old/new crop soybean spread to widen in the absence of fresh export demand and weakness in Brazilian cash markets, briefly eased some concerns about tightening domestic U.S. soy availability, analysts said.

 

The July/November bull spread settled at US$1.37 a bushel, down from Tuesday's settlement of US$1.43 cents.

 

Weakness in soymeal added pressure to nearby soybeans, while new crop contracts garnered support from the uncertainty of 2009 plantings and production amid seeding delays in the eastern Midwest.

 

T-storm Weather LLC said rain will linger across the southeast half of Indiana and Ohio through Thursday. The forecast calls for a few showers across southeast Iowa, northeast Missouri, much of central/southern Illinois and central/southern Indiana from Friday night through Saturday night.

 

On tap for Thursday, U.S. Census Bureau will release its April soybean crush report at 8 a.m. EDT, (1200 GMT). U.S. Census Bureau is expected to estimate the April soybean crush at 141.2 million bushels, down from last month on fewer crushing days in the month, according to a survey of industry analysts.

 

April soymeal stocks are seen declining to 339,400 short tonnes from the 355,453 tonnes reported for March. Soyoil stocks are seen climbing to 3.17 billion pounds in the report, up from 3.058 billion the previous month.

 

The April crush report will be closely scrutinized for any sign of domestic soy demand rationing, according to a market note from AgResource Co.

 

 

SOY PRODUCTS

 

Soymeal futures stumbled, backpedalling from an early climb to new 10-month highs. Tight availability of old crop soybeans to crush remained supportive features for the market, but once prices satisfied an upside objective, and soybeans stumbled, profit taking became the day's feature, analysts said.

 

Soyoil futures ended Wednesday's session posting modest gains, benefiting from adjustments in the meal/oil spread relationship. Profit-taking in soymeal and on meal/oil spreads helped underpin soyoil despite bearishly perceived domestic supplies, analysts said.

 

July oil share ended at 32.82%. The July soybean crush ended at 78 1/2 cents.