December 18, 2009

 

CBOT Soy Review on Thursday: Falls hard on profit-taking, firm dollar

 

 

Profit-taking and strength in the U.S. dollar pulled Chicago Board of Trade soy futures sharply lower Thursday amid widespread selling in commodities.

 

January soy ended down 37 1/2 cents, at US$10.22 a bushel. March soy lost 37 cents, to US$10.30.

 

Traders wanted to take money off the table ahead of the end of the month and the year, said Tim Hannagan, analyst for PFG Best. They booked profits early because Christmas and New Year's Eve will shorten trading during the next two weeks, he said.

 

The market had room to pull back after climbing during the past week, a trader said. January soy had rallied more than 50 cents from last week's low to this week's high.

 

"They were going to take profits no matter what," Hannagan said.

 

Gains in the U.S. dollar and losses in crude oil and precious metals encouraged soy's losses, a trader said. A firm dollar reduces traders' appetite for risk and makes U.S. commodities less attractive to foreign buyers, he said.

 

Hannagan said he expected to see a bounce Friday after Thursday's slide. Commodity funds sold an estimated 6,000 soy contracts.

 

Despite the sell-off, demand continued to look strong, an analyst said. The U.S. Department of Agriculture said total weekly U.S. soy export sales were 944,700 metric tonnes, toward the high end of expectations.

 

 

Soy Products

 

CBOT soy product futures fell hard with soy. Strength in the U.S. dollar created a negative tonnee, and traders were pocketing profits in the soy complex, analysts said.

 

January soymeal finished US$9.50 lower, at US$307.40 per short tonne. January soyoil dropped 169 points, to 38.64 cents per pound.

 

Weakness in crude oil added to the negative tonnee for soyoil, a trader said. Weakening cash prices were a drag on soymeal, an analyst said. Commodity funds sold an estimated 3,000 soyoil contracts and 2,000 soymeal contracts.

 

Weekly U.S. soymeal export sales of 184,400 tonnes were within trade expectations of 125,000 to 250,000 tonnes. Weekly soyoil export sales of 20,700 tonnes were within expectations of 5,000 to 25,000.