October 17, 2007

 

CBOT Soy Review on Tuesday: Retreats lower; lacks fresh supportive news

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, retracing most of Monday's gains on speculative and commercial selling attributed to a lack of fresh supportive news.

 

November soybeans settled 9 1/2 cents lower at US$9.77 1/2 and January soybeans ended 9 cents lower at US$9.96 3/4. December soymeal settled US$5.30 lower at US$275.90. December soyoil finished 17 points higher at 40.23.

 

"Its getting tougher to find news to support expanding upon soybean prices above the US$10.00 level, with improving planting conditions in Brazil, and ideas harvest delays in the Midwest won't raise any serious issues uncovering selling interest," said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The market is finding farmer selling at higher levels and with signs of upside exhaustion near the US$10.00 level basis November futures, speculative traders found it easy to take profits, Scoville added.

 

Meanwhile, spillover pressure from wheat and a higher U.S. dollar index managed to take some bullish edge off the market, but downside movement was limited by supportive longer range fundamentals of tightening supplies and solid demand, analysts said.

 

The DTN Meteorlogix Weather Services forecast said continued rain this week is likely to slow harvest progress across the Midwest, especially in northern areas. Up to an inch of rain fell on the Midwest Monday into Tuesday, with the heaviest in the west. Rains will develop again Wednesday in the region, with the western end of the Midwest getting up to an inch and a half Wednesday night into Thursday, and up to an inch in the eastern end, Meteorlogix reports.

 

Northern Brazil is dry again after some light rain this weekend, and no rain is expected in the soybean-growing areas until the middle of next week, but planting progress is expected on the strength of the rain that has already fallen, Meteorlogix said.

 

In pit trades, Term Commodities bought 500 January, ADM Investor Services sold 300 January and Iowa Grain sold 400 January. Speculative fund selling was estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil managing to divorce itself from the rest of the complex on borrowed strength from record high crude oil prices. Soyoil continued to be influenced by strength in energy markets, with record higher crude oil futures energizing speculative interest in world vegoils amid their ability to be an alternative to some energy products, analysts said. November crude oil future spiked to an intraday high of US$88.20 a barrel, a new record high price.

 

Soymeal futures stumbled lower with soybeans, succumbing to technical selling and oil/meal spreading, analysts added.

 

December oil share ended at 42.17% and the November/December crush ended at 72 cents.

 

In soymeal trades, speculative fund selling is estimated at 2,000 lots with buyers and sellers lightly scattered among various commission houses.

 

In soyoil trades, commercial and speculative fund buying were both estimated at 1,000 lots, with Tenco a featured buyer of 600 May.