November 14, 2009

 

CBOT Soy Review on Friday: Soy retreat on profit-taking pressure

 

 

Chicago Board of Trade soy futures ended mostly lower Friday, pulling back from earlier advances on pre-weekend profit taking.

 

CBOT Jan soy ended 3 cents lower at US$9.87.

 

In pit trades, speculative funds were estimated sellers of 1,000 lots in soy, and 1,000 lots in soyoil.

 

The absence of follow-through buying once the market satisfied near-term upside technical objectives, opened the door for traders to book profits on recent gains ahead of the weekend, analysts said.

 

Futures initially climbed to new highs for the week, continuing Thursday's rally on optimistic demand hopes for soymeal and bullish weekly export data.

 

Technically inspired buying added support to extend the market's upward theme. However, a lack of follow-through buying at session highs and perceptions that the quality issues in distillers dried grains was limited, enticed traders into reducing risk exposure down the stretch, analysts said.

 

The U.S. Department of Agriculture reported total weekly soy export sales were a net 1,272,500 metric tonnes for the week ended Nov. 5. Analysts had forecast sales between 500,000 and 700,000 metric tonnes. USDA reported a marketing year high 1,636,200 metric tonnes were shipped in the week ended Nov. 5, with China the primary destination for 1,130,000 tonnes.

 

On tap for Monday, the National Oilseed Processors Association's report on the October soy crush is scheduled to be released at 8:30 a.m. EST. The soy crush rate in NOPA's monthly soy crush report for October is expected to climb from the previous month, coming in near 139.1 million bushels, according to the average estimate in a survey of industry analysts. Estimates for the report ranged from as low as 134.5 million bushels to as high as 144 million bushels.

 

USDA will also report on soy expected for export and harvest progress in their weekly crop condition and progress reports. Analysts expect the report to show soy harvest progress exceeding of 90% as of Sunday.

 

 

Soy Products

 

Soy product futures ended mixed, with soymeal and soyoil reversing course at midday. Soymeal futures ended mostly lower, finishing well off initial advances, as traders booked profits after rallying to the top of a month long trading range this week. The market initially climbed on demand, continuing to garner support from the potential for increased domestic meal feedings on DDG quality concerns and strong weekly export sales. However, after the fear of DDG concerns were tempered on perceptions the quality issues would be limited to only regional areas, traders trimmed risk premium, analysts said.

 

Soyoil futures managed to rebound on traders unwinding some meal/oil spreads heading into the weekend.

 

December soymeal ended US$0.10 higher at US$301.10 per short tonne, and December soyoil finished 24 points higher at 38.61 cents per pound.

 

December oil share was 39.1%, while the November/December soy crush ended at 83 1/4 cents.