November 28, 2007

 

CBOT Soy Review on Tuesday: Down on speculative profit taking, weak outside markets

 

 

Chicago Board of Trade soybean futures ended Tuesday's session lower, posting double digit declines on speculative profit taking amid sharp losses in outside inflationary markets.

 

January soybeans settled 12 3/4 cents lower at US$10.91 and March soybeans ended 13 1/4 cents lower at US$11.07 3/4. January soymeal settled US$2.30 lower at US$293.70 per short tonne. January soyoil finished 55 points lower at 46.75 cents per pound.

 

The bearish influence of sharply lower crude oil and metal futures amid strength in the U.S. dollar uncovered broad-based speculative selling to pin prices in negative territory, analysts said.

 

Carryover weakness from the overnight session set the tonnee of the market, with fresh export sales to China unable to offset the impact of weakness filtering through commodity markets in general, analysts added.

 

Overall activity remained subdued, as the ability of the market to hold nearby technical support at the January contract's 10-day moving average and news that China continues to buy at lofty prices levels provided some underlying support to limit declines, analysts said.

 

Otherwise, the market had little fresh influences to generate aggressive activity as traders kept a close eye on weakness in the outside markets, a CBOT floor broker added.

 

The U.S. Department of Agriculture announced Tuesday private export sales of 120,000 metric tonnes of soybeans for delivery to China in the 2007-08 marketing year.

 

The DTN Meteorlogix weather forecast said warmer, drier weather in Brazil's soybean-growing areas will be beneficial to planting, but wetter weather is expected Thursday in the central Brazilian states of Goias and Bahia. To the north, scattered showers are expected Friday and Saturday. Temperatures will be above normal, into the mid-90s in places.

 

In Argentina, soil moisture is being reduced by dry conditions that are also very hot, approaching 100 degrees Fahrenheit in the center of the country, Meteorlogix reports. This week will remain mostly dry and hot, but the long-range forecast give wetter weather a good chance to cool things down in a week or so, Meteorlogix forecasts.

 

In pit trades, Tenco sold 300 January, and UBS Securities sold 600 January. Speculative fund selling was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, with soyoil the downside leader of the products. Soyoil futures ended lower, back filling prior gains on speculative profit taking, analysts said. The market was pressured by speculative selling attributed to borrowed weakness from crude oil and Malaysian palm oil futures. However, active contract held above meaningful moving average support, with strong demand remaining an underpinning feature, analysts added.

 

Egypt's General Authority for Supply Commodities bought 15,000 metric tonnes of soy oil through private intermediary, Meditrade, in a tender, traders said Tuesday.

 

Soymeal futures ended lower, retreating in unison with declines in the rest of the soycomplex.

 

December oil share ended at 44.38% and the December/January crush ended at 56 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with Fimat a buyer of 1,000 December. Speculative fund selling was estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, Tenco selling 500 January, Fimat a seller of 400 January, and Iowa Grain selling 300 January. Speculative fund selling was estimated at 3,000 lots.