December 2, 2008
CBOT Soy Review on Monday: Lower; broad-based weakness weighs
Chicago Board of Trade soybean futures backpedaled Monday, uncovering short sellers amid broad-based weakness across commodity and financial markets.
CBOT January soybeans finished 37 cents lower at US$8.46.
January soymeal settled US$3.80 lower at US$250.50 per short tonne. January soyoil finished 150 points lower at 31.40 cents per pound.
"With little fresh fundamental news to feed off of, outside market influences served as the drivers of price direction," said Tim Hannagan, analyst with Alaron Trading in Chicago.
The deleveraging of commodities promoted a bearish market psychology, with sharply lower equities, crude oil and precious metals futures in conjunction with a stronger U.S. dollar serving as the catalyst, Hannagan added.
The absence of new directional news to focus on kept trader attention on the outside markets, but improved soil moisture in dry areas of Argentina's crop belt did apply fundamental pressure to aide the defensive tonnee.
The DTN Meteorlogix weather forecast said in the main crop areas of South America, soil moisture supplies are mixed. Central Argentina's soil moisture supply is much improved after rain in the past two weeks. However, the western portion of southern Brazil's Rio Grande do Sul province continues to be dry.
During this week, Meteorlogix calls for mainly dry conditions in Argentina and a few light showers in southern Brazil. The dry weather in Argentina will have little effect due to the recent rains. However, southern Brazil will have a more stressful situation due to the continuing drier weather pattern.
The U.S. Department of Agriculture reported soybeans inspected for export in the week ended Nov. 27 totaled 37.454 million bushels, near the high end of pre-report analyst estimates that ranged from 32 million to 38 million. Accumulated soybean export inspections total 351.718 million bushels, a 12.7% increase from the total at the same time last year.
In pit trades, speculative fund selling was estimated at 3,000 lots.
Soy product futures stumbled in unison with soybeans, with weakness in crude oil pressuring soyoil. Meanwhile, spillover from soybeans and worries that slowing global economies will slow demand weighed on soymeal, analysts said.
January oil share ended at 38.74% and the January crush ended at 50 1/2 cents.