June 3, 2009

 

CBOT Soy Review on Tuesday: Settles lower as traders take profits

 

 

Profit-taking pulled down Chicago Board of Trade soybean futures Tuesday as the market retreated from recent gains.

 

July soybeans closed down 9 1/2 cents at US$12.09 a bushel. July soymeal fell US$3.30 to US$387.50 per short tonne, and July soyoil rose 5 points to 40.50 cents per pound.

 

Soybeans backpedaled after the nearby July contract Monday hit an eight-month high with the help of fund buying and supportive outside markets. Commodity funds sold an estimated 4,000 contracts Tuesday.

 

Despite the setback, there are still bullish concerns about tight old-crop U.S. ending stocks, traders said. Traders are watching the development of the new U.S. soybean crop, which was 66% planted as of Sunday, compared to 67% last year and the average of 79%.

 

Planting has been delayed in certain areas by excessively wet weather. The crop was 36% emerged, compared to 30% last year and the average of 51%, according to the U.S. Department of Agriculture.

 

"I think we'll get the soybean acres in the ground," said Sid Love, analyst for Kropf & Love Consulting. "The question is will we lose some yield? Perhaps. Maybe a bushel, maybe more."

 

Louise Gartner, analyst for Spectrum Commodities, agreed producers will get the crop planted. She said she thought soybeans were "about done" with their rally. As of Tuesday's close, July soybeans have rallied US$2.26 during the past five weeks.

 

"The weather is good in the Midwest," Gartner said. "They're going to get it planted. You're going to see more beans. It's going to be really hard for beans to sustain this kind of a move."

 

Index funds started rolling out of the nearby July contract at the close and purchasing 2010 contracts, a trader said. Deferred futures, starting with the May 2010 contract, ended firmer.

 

 

Soy Products

 

CBOT soy product futures ended mixed, as soymeal slipped lower with soybeans. Profit-taking weighed on soymeal after recent gains, while soyoil edged higher as crude oil firmed up, traders said.

 

Soyoil did not have the pressure of commodity fund selling by the close of trading, traders said. Funds sold an estimated 1,000 contracts in soymeal and were seen as even in soyoil.