December 5, 2009

 

CBOT Soy Review on Friday: Lower, succumbs to bearish outside influences

 

 

Soy futures at the Chicago Board of Trade ended lower Friday, succumbing to bearish outside market influences.

 

CBOT January soy ended 4 cents lower at US$10.43, and March soy settled 4 cents lower at US$10.50 1/2.

 

In pit trades, speculative funds were estimated sellers of 3,000 lots in soy, and 1,000 lots in soymeal.

 

A sharp rise in the U.S. dollar, following the U.S. Labor Department's saying the U.S. unemployment rate had dropped in November, served as a bearish catalyst to attract speculative sellers, analysts said.

 

The combination of gold futures tumbling, crude oil retreating into negative territory and U.S. equities giving up most of their early gains, opened the door for profit-taking pressure to emerge, analysts added.

 

Technical weakness aided the defensive tonnee, with the inability of futures to attract buying once they had challenged Thursday's highs, sent buyers running for cover.

 

However, traders were encouraged by the January contract's ability to bounce off its lows and finish well above technical support in the US$10.35 area. The outside weakness weighed on bullish sentiment, but declines remained limited by support from strong world soy demand, a CBOT floor analyst said.

 

Market participants still see value in the soy market, with demand the underpinning factor. Nevertheless, traders continue to express disappointed that the amount of speculative money flowing into the market has not materialized as many had expected this month.

 

The U.S. Department of Agriculture announced Friday that private export sales of 232,000 metric tonnes of soy for delivery to China in the 2009-10 marketing year.

 

 

Soy Products

 

Soy product futures ended mixed, with spreading between the products being a featured attraction. Soyoil futures managed to gain product share value on spreads, benefiting from profit-taking on long meal/short oil spreads, and bullish analyst forecasts for world vegoil demand, analysts said.

 

Soymeal futures ended lower with soy, under pressure from profit-taking and the bearish impact of a sharply higher U.S. dollar on commodities, analysts said.

 

December soymeal ended US$0.60 lower at US$320.90 per short tonne, while March soymeal settled at US$1.80 lower at US$310.70. December soyoil finished 1 point higher at 39.76 cents per pound, while March soyoil ended 1 point higher at 40.13.

 

January oil share was 39.23 while the January soy crush ended at 82 cents.