December 31, 2009

 

CBOT Soy Review on Wednesday: Soy slip on profit-taking setback

 

 

Chicago Board of Trade soy futures finished weaker Wednesday as traders took money off the table following gains earlier in the week and ahead of the holiday weekend.

 

January soy closed down 1 3/4 cents at US$10.36 1/4 a bushel. March soy fell 2 1/2 cents at US$10.44 1/2.

 

Prices slipped in slow, thin trading ahead of the end of the year. Commodity funds sold an estimated 4,000 contracts.

 

The market was temporarily higher before settling lower, and trading is expected to remain choppy Thursday. The CBOT has an abbreviated trading session Thursday and will be closed Friday for New Year's Day.

 

"The volume is light enough that you just don't really try to make much of a day-to-day statement," an analyst said.

 

Prices fell even though traders continue to expect index funds to buy at the start of the new year as they rebalance portfolios, analysts said. It seems as though there has been some buying recently in anticipation of the rebalancing, they said.

 

Traders are keeping an eye on conditions for the developing soy crop in South America, where weather has been largely favorable. Localized dryness is expected to diminish in Brazil's Mato Grosso and Parana--two key soy states--during the next week, according to a late forecast from T-Storm Weather.

 

Market participants also are waiting for the U.S. Department of Agriculture to issue U.S. production and global supply/demand estimates in crop reports Jan. 12. The market will remain uncertain until it receives data from the government, an analyst said.

 

Soy Products

 

Soy product futures finished mostly stronger, despite the weakness in soy. Soyoil felt some spillover support from gains in crude oil, a trader said. Commodity funds bought an estimated 2,000 soyoil contracts and 1,000 soymeal contracts.

 

March soymeal finished up 60 cents at US$308.20 per short tonne. March soyoil ended up 7 points at 39.92 cents per pound.

 

First notice day for January soy contracts is Thursday. Traders expect to see zero deliveries against the January soymeal contract and about 2,000 to 3,000 deliveries against the soyoil contract. Traders pegged soy deliveries around 100 to 300 contracts, while some analysts expect to see 500 to 1,000 contracts posted for delivery.