December 2, 2009

 

CBOT Soy Review on Tuesday: Retreats, slips from highs on profit taking

 

 

Soy futures on the Chicago Board of Trade ended lower Tuesday, backpedaling from an initial climb to 5 1/2 month highs on profit taking pressure.

 

CBOT January soy ended 1 cent lower at US$10.59 1/2, and March soy settled unchanged at US$10.66.

 

In pit trades, speculative funds were estimated sellers of 1,000 lots in soymeal and buyers of 2,000 lots in soyoil.

 

The market extended its current uptrend heading out of the starting gate. However, once the market satisfied near term upside technical objectives and fund buying subsided, participants quickly booked profits.

 

The market was able to fill a chart gap up to US$10.77 basis the January contract on open outcry charts, and once that failed to attract follow through buying, profit taking emerged, said John Kleist, broker/analyst with Allendale Inc.

 

Prices tumbled heading down the stretch. "The market had built up some lofty expectations for fund buying to start the new month and once that buying failed to materialize, sellers quickly emerged," said Victor Lespinasse, analyst with Grainanalyst.com.

 

Nevertheless, declines were limited by strong demand and outside market support. Nothing weighed on prices for most of the day, with an absence of harvest pressure, demand outstripping supply and weakness in the U.S. dollar providing a bullish situation for traders to absorb, said Tim Hannagan, analyst with PFG Best in Chicago.

 

This was consistent until exhausted buying uncovered selling to send prices retreating heading down the stretch.

 

 

Soy Products

 

Soy product futures ended mixed, with meal/oil spreading featured in late action. Soymeal futures stumbled in unison with late declines in soy. Soyoil futures finished higher, buoyed by spillover support from higher crude oil futures and adjustments in the meal/oil spread relationship.

 

December soymeal ended US$2.10 lower at US$324.70 per short tonne, while March soymeal settled at US$1.80 lower at US$313.40. December soyoil finished 39 points higher at 40.58 cents per pound, while March soyoil ended 34 points higher at 40.92.

 

January oil share was 39.53 while the January soy crush ended at 80 cents.