December 1, 2007

 

CBOT Soy Review on Friday: Down; deliveries, outsides attract speculative sales

 

 

Chicago Board of Trade soybean futures stumbled lower Friday, succumbing to end-of-month position squaring, spillover weakness from outside markets and heavy deliveries in the soy products.

 

January soybeans settled 18 cents lower at US$10.80 and March soybeans ended 17 1/2 cents lower at US$10.97 1/2. January soymeal settled US$2.60 lower at US$293.00 per short tonnne. January soyoil finished 54 points lower at 46.10 cents per pound.

 

Sharp losses overnight set the tonnnee for the market, with larger-than-expected deliveries in the products and a sharp drop in crude oil futures attracting speculative sales, said Brian Hoops, president of Midwest Market Solutions in Yanktonnne, S.D.

 

However, futures managed to stage a modest bounce at midday, garnering strength from a recovery in wheat and crude oil futures, with end user buying on price dips helping futures trim early losses, analysts said.

 

The market remains supported by strong demand trends, Hoops said.

 

Nevertheless, as the session drew to a close, a late drop in outside markets allowed month-end profit-taking to resurface and send prices near session lows down the stretch, traders said. The inability of nearby contracts to hold support at their 10-day moving averages attracted speculative sales as well, traders said.

 

The DTN Meteorlogix weather forecast for Brazil said wet weather in Bahia state and showers in Mato Grosso state continue to improve the outlook for the country's early planted soybean crop. Drier weather in the south will favor planting and field work through Monday. Showers after that will favor any early planted soybeans in the region.

 

In Argentina, central crop areas are expected to have a few scattered showers Saturday and again Tuesday. This will favor early growth of crops but a more widespread rain is needed in the western growing region of Cordoba. Hot temperatures Friday and during the weekend will give way to cooler temperatures early next week. Hot weather may redevelop toward the end of next week, Meteorlogix said.

 

In pit trades, ADM Investor Services sold 500 January, Tenco and UBS Securities each sold 300 January. Speculative fund selling was estimated at 5,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, pressured by month-end long liquidation, spillover weakness from outside markets and heavy deliveries in both markets. Soyoil futures were influenced by a sharp drop in crude oil futures for most of the day, with much higher than expected deliveries posted against the nearby December contracts sending negative waves filtering through the market, analysts said.

 

Soymeal futures ended lower, in step with the rest of the soy complex, with larger than expected deliveries serving as the underlying theme for the declines, traders said.

 

January oil share ended at 44.03% and the January crush ended at 71 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds net sellers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative funds net sellers on the day.