November 19, 2009

 

CBOT Soy Review on Wednesday: Beans settle lower on profit taking

 

 

Soy futures on the Chicago Board of Trade ended lower Wednesday, pulling back from prior gains on profit taking.

 

CBOT Jan soy ended 2 1/2 cents lower at US$10.27, and March soy settled 2 1/2 cents lower at US$10.33 1/4.

 

In pit trades, speculative funds were estimated sellers of 4,000 lots in soy.

 

After rallying to three-month highs, futures experienced a profit-taking setback, said John Kleist, broker/analyst with Allendale Inc.

 

The market consolidated a 1 1/2-week uptrend, taking a breather as the market attempted to catch its breath while looking for its footing, Kleist said.

 

Futures initially extended its bullish theme on speculative buying associated with weakness in the U.S. dollar. Strong export and crushing demand provided fundamental justification for the gains.

 

However, overbought technical signals and the exhaustion of speculative buying uncovered selling interest, with traders booking profits heading down the stretch, analysts said.

 

Looking ahead, analysts said futures would continue to experience choppy activity, with speculative money flow and export demand underpinning prices, while record U.S. and South American production forecasts weigh on the market.

 

The DTN Meteorlogix weather forecast said soil moisture will continue to improve in Argentina over the next week due to repeated rounds of thunderstorms. Near- to above-average rainfall will occur in Cordoba and Santa Fe this month, with above-average rainfall in Entre Rios as dryness issues end.

 

The U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST Thursday. Analysts surveyed by Dow Jones Newswires estimate soy sales for the week ended Oct. 22 to be in the range of 700,000 to 1,000,000 metric tonnenes. Soymeal export sales are seen between 100,000 and 225,000 tonnenes, while soyoil sales are pegged between 5,000 and 20,000 tonnenes.

 

 

Soy Products

 

Soy product futures ended mixed, with soyoil futures consolidating after rising to a new five-month high in early trade. Weakness in the U.S. dollar and borrowed strength from crude oil futures underpinned soyoil initially, but once crude oil reversed direction, futures quickly retraced the early gains, analysts say. Solid underlying demand is supportive, but without outside support, futures struggled to maintain upside momentum, analysts added.

 

Soymeal futures ended mixed, with nearby contracts finishing higher on strong near-term demand and firming cash basis levels. A minor correction in the meal/oil spread relationship underpinned meal as well.

 

December soymeal ended US$1.80 higher at US$310.50 per short tonnene, and December soyoil finished 6 points lower at 39.05 cents per pound.

 

December oil share was 39.34 while the January/December soy crush ended at 79 1/2 cents.