December 19, 2007

 

CBOT Soy Review on Tuesday: Settles lower; speculative profit taking featured

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, falling on profit-taking from speculative funds amid the absence of fresh supportive news.

 

January soybeans settled 7 cents lower at US$11.49 3/4 a bushel and March soybeans ended 7 1/2 cents lower at US$11.68 1/2. January soymeal settled US$2.20 lower at US$322.50 per short tonne. January soyoil finished 4 points higher at 46.21 cents per pound.

 

A quiet news front left traders looking at technically overbought conditions, with a stronger U.S. dollar and end-of-the-year position evening providing additional pressure to encourage participants to book some profits in the last full trading week of the year, analysts said.

 

Private weather forecasts pointing to improved moisture prospects for Argentina next week was a defensive feature as well, traders said.

 

The overall theme of Tuesday's market was a profit-taking setback from 34-year highs, analysts added.

 

Nevertheless, the market remains fundamentally underpinned, but without a bullish spark to extend prior gains, a CBOT floor analyst said. Consolidation seems the like near term path for prices, the analyst added.

 

The DTN Meteorlogix weather forecast said Brazil and Argentina have a mixed weather picture. Northern Brazil has had only light showers and temperatures in the 80s and 90s Fahrenheit. Up to half an inch of rain is possible in Rio Grande do Sul and Parana states Tuesday into Wednesday, but dry again through Friday. Some light showers are expected over the weekend, with some locally heavier rains. Mato Grosso and Goias will get some showers and thunderstorms this week, but Mato Grosso do Sul will get only a few showers.

 

In Argentina, conditions are hot and dry. Temperatures are expected to remain high - hitting triple digits in La Pampa and Cordoba regions. The next couple days will see some light rain, and by Friday thunderstorms are expected to develop, with temperatures dropping Friday and Saturday. Conditions Sunday will be back to warm and dry, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal retreating on profit-taking pressure in unison with declines in soybeans. A quiet news front is providing little fresh direction for the market, opening the door for traders to even up some positions ahead of the holidays, analysts said.

 

Soyoil futures ended a choppy two-sided session modestly higher, managing to carve out gains on light short covering from recent declines and the unwinding of some meal/oil spreads, analysts added. The long-range outlook remains supportive and that continues to limit downside potential, traders added.

 

January oil share ended at 41.74% and the January crush ended at 68 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund sales estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses.