May 30, 2008

 

CBOT Soy Review on Thursday: Tumbles; outside markets trigger speculative sales

 

 

Chicago Board of Trade soybean futures plunged Thursday, succumbing to broad-based speculative sales across commodities on end-of-month profit taking and liquidation, analysts said.

 

July soybeans settled 50 cents lower at US$13.22 3/4, and November soybeans ended 35 3/4 cents lower at US$13.21 1/2. July soymeal settled US$11.90 lower at US$331.80 per short tonne. July soyoil finished 235 points higher at 60.30 cents per pound.

 

The influence of outside markets with an over-US$4.00-a-barrel slide in crude oil futures and an over US$23-an-ounce drop in gold futures sent negative waves filtering through the commodities sector, analysts said.

 

There was money flowing out of commodities Thursday, as strength in the U.S. dollar and subsequent tumble in crude and gold sent buyers running for cover, said Bill Nelson, grains analyst with Wachovia Securities in St. Louis, Mo. Speculative funds liquidated some longs to keep pressure on prices, traders said. Technically inspired selling helped accelerate losses amid the ability of active contracts to pierce through support at major moving averages, traders added.

 

Fund selling was the dominant factor in the market, overshadowing supportive demand fundamentals amid the lingering Argentina farmers' strike and the uncertainty of 2008 soybean acreage and output.

 

The influence of outside markets was a key contributor to the direction of prices, with news the U.S. Commodity Futures Trading Commission said Thursday it was expanding its surveillance of the energy markets, and had begun an investigation into potential oil market manipulation in the U.S. This sparked fears that the CFTC could take action to limit the role of speculative funds in the commodities markets.

 

The news was seen aiding fund liquidation in the markets, a trader added.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 6,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, posting sharp declines on the back of broad-based speculative selling in commodities. Soyoil futures tumbled in unison with the heavy losses in crude oil futures, with technically inspired speculative profit taking aiding the defensive tonnee, analysts said.

 

Soymeal futures followed the lower theme flowing through the commodity sector, with end-of-month speculative profit taking featured, the analysts added.

 

July oil share ended at 47.61% and the July crush ended at 70 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 4,000 lots.