November 19, 2008
CBOT Soy Review on Tuesday: Lower; chops around; lacks fundamental news
Chicago Board of Trade soybean futures ended lower Tuesday, after experiencing choppy two-sided trade in the absence of fresh fundamental news.
CBOT January soybeans finished 4 1/2 cents lower at US$9.02.
January soymeal settled US$3.90 lower at US$267.40 per short tonne. January soyoil finished 4 points lower at 32.28 cents per pound.
Futures failed to receive any definitive direction from fundamentals, technicals or outside markets to break prices out of its recent 6-week sideways trading range, said Mike Zuzolo, senior analyst Risk Management Commodities in Lafayette, IN.
"There is no sense of urgency to aggressively push a position in the market, with global economic worries offsetting bullish demand, firm cash basis and weather issues for Argentina," Zuzolo added.
Two-sided action was featured, with choppy tonnees in outside markets aiding the price theme.
Soybeans remain in a near term downtrend, but are holding in an intermediate uptrend, said John Kleist, broker/analyst with Allendale Inc. in McHenry, Ill.
The market will remain in a holding pattern until supply and demand fundamentals determine when the market will break out, with demand from China a key determinant of price direction once outside markets stabilize, Kleist added.
Dryness concerns in Argentina provided mild support to limit declines as well. However, traders said while South American weather is on the radar, it's still a little early before the weather becomes a mover of prices.
The DTN Meteorlogix weather forecast said the trend towards below normal rain and above normal temperatures continues in Argentina's central crop belt. This weather pattern is increasing stress to early-planted summer crops.
Soy product futures drifted lower after testing both sides of unchanged levels. A quiet news front, mixed signals from outside markets and spillover from soybeans set the stage for the session's choppy tonnee. However, soyoil managed to regain some product share versus soymeal on spreads amid borrowed strength from crude oil.
January oil share ended at 37.64% and the January crush ended at 41 1/2 cents.