CBOT Soy Review on Thursday: Plunge on broad-based speculative liquidation

  

 

November soybeans ended 49 cents lower at US$10.04.

 

December soymeal settled US$11.70 lower at US$274.50 per short tonne. December soyoil finished 150 points lower at 43.18 cents per pound.

 

Continued liquidation by funds coupled with commercial hedging served as the catalyst for the session's heavy losses, said Joe Victor, analyst with Allendale Inc.

 

Fears that the slowdown in U.S. and global economic growth will hurt demand for commodities sent bearish ripples through the market.

 

The most-active November futures dropped below the psychological US$10.00 per bushel level for the first time in 11 months on an intra-day basis.

 

The losses weren't fundamentally related, speculative longs were just uncomfortable holding at risk positions in the face of weakness in the financial sector, said Shawn McCambridge, senior grains analyst with Prudential Bache.

 

Meanwhile, favorable near-term weather for late maturing crops and harvest operations added weakness, with commercial hedging reported heading into the fall harvest.

 

Looking ahead, soybeans have good solid economic value at current levels, based on its demand structure, Victor said. Once fund liquidation runs its course, the market will have set its seasonal bottom and upside movement will be geared toward demand, he added.

 

The DTN Meteorlogix forecast calls for cool to very cool weather in the northern Midwest. Some frost is likely, along with possible light freezing conditions. This chilly temperature event will likely not cause significant crop damage.

 

Following the brief round of colder weather in the Midwest, a return to mild temperatures is in store for the corn and soybean areas during the weekend. Temperatures will be generally above normal, which will return crop weather to a favorable status for late-season progress and harvest, Meteorlogix reports.

 

In pit trades, speculative fund selling was estimated at 4,000 lots.

  

SOY PRODUCTS  

 

Soy product prices were trounced in unison with soybeans, with speculative selling featured. Macroeconomic woes kept sellers in command of price direction, as buyers fled the market in attempts to reduce that risk exposure in the commodity sector. The selling pressure overshadowed supportive weekly export sales in the products.

 

December oil share ended at 44.03% and the November/December crush ended at 74 3/4 cents.