December 9, 2009

 

CBOT Soy Review on Tuesday: Lower, consolidates prior gains

 

 

Soy futures at the Chicago Board of Trade settled lower Tuesday after Monday's advances, as the market consolidated in the absence of fresh support.

 

CBOT January soy ended 9 cents lower at US$10.44, and March soy settled 8 1/4 cents lower at US$10.52 3/4.

 

Speculative funds were estimated sellers of 5,000 lots in soy and 2,000 lots in soyoil, while buyers of 1,000 lots in soymeal.

 

Bearish outside market influences, with a firmer U.S. dollar and weakness in crude oil and metals, opened the door for a minor profit-taking correction to occur, a CBOT floor analyst said.

 

The inability of futures to attract speculative buying left the market void of any significant buying to support higher overnight price action, analysts said.

 

However, despite the session's losses, downside pressure remained limited by strong underlying world soy demand and the anticipation of a tighter soy balance sheet in Thursday's supply and demand.

 

The ability of futures not to challenge support at the US$10.35 level basis January soy was encouraging to market bulls, as it kept prices in a two-month-old uptrend on the daily bar chart, a technical analyst said.

 

The U.S. Department of Agriculture will release its December supply and demand report Thursday at 8:30 a.m. EST. The average estimate of analysts surveyed by Dow Jones Newswires pegs U.S. soy 09/10 ending stocks at 235 million bushels, down from the November USDA forecast of 270 million bushels.

 

 

Soy Products

 

Soy product futures ended lower, backpedaling in unison with soy futures. The absence of fresh supportive news and strength in the U.S. dollar helped weigh on prices as well, analysts said. Soyoil futures did manage to gains some product share value on spreads, garnering support from bullish world vegoil demand outlooks. However, lower crude oil futures served as a bearish influence to limit any upside potential.

 

December soymeal ended US$4.80 lower at US$316.60 a short tonne, while March soymeal settled at US$4.30 lower at US$308.10. December soyoil finished 20 points lower at 40.11 cents a pound, while March soyoil ended 18 points lower at 40.49.

 

January oil share was 39.68 while the January soy crush ended at 79 1/4 cents.