March 14, 2009

 

CBOT Soy Review on Friday: Lower, position evening, acreage outlooks

 

 

Chicago Board of Trade soybean futures stumbled lower Friday, back filling prior gains on end-of-week position squaring and bearish new crop acreage outlooks.

 

CBOT March soybeans settled 16 1/2 cents lower at US$8.82 1/2, and May soybeans ended 5 1/2 cents lower at US$8.76 1/2. November soybeans settled 17 3/4 cents lower at US$8.23 3/4. In pit trades, speculative fund selling was estimated at 3,000 lots.

 

May soymeal settled US$0.20 higher at US$276.70 per short tonne. May soyoil finished 21 points lower at 30.17 cents per pound. The general sense of economic uncertainty coupled with overbought conditions following recent gains encouraged traders to book some profits in an effort to reduce risk exposure heading into the weekend, analysts said.

 

The market is teetering on the movements of outside markets, and traders are taking a cautious approach with economic jitters flowing, a CBOT floor analyst said.

 

The absence of the supportive push from outside equity and crude oil markets limited buyer interest as well, with bearishly perceived 2009 acreage forecasts adding weight to pin prices in negative territory.

 

Old/new crop spreading and corn/soybean spreading was featured also, reflective of private acreage estimates pointing to higher new crop soybean acres. Otherwise, activity was subdued with traders taking a wait and see approach in the absence of fresh demand news.

 

Private analytical firm Informa Economics on Friday pegged 2009 soybean plantings at 81.5 million acres, according to traders. In January, Informa estimated 2009 U.S. soybean plantings at 80.8 million acres and corn acres at 82.7 million, according to traders. The U.S. Department of Agriculture will release its prospective plantings report March 31 at 8:30 a.m. EDT.

 

The National Oilseed Processors Association is expected to estimate February soybean crush at 126.2 million bushels, down from last month on sluggish domestic meal demand, according to a survey of industry analysts. NOPA soyoil stocks in February are expected to increase by 158 million pounds to 2.551 billion pounds from the 2.393 billion reported in January. NOPA is expected to release its figures Monday at 8:30 a.m. EDT (1230 GMT).

 

Argentina's 2007-08 soybean production will total just 40 million to 42 million metric tonnes, a 9% to 12% drop on the year, according to the Argentine Association of Agricultural Research Consortiums, or CREA. The CREA report adds to the chorus of private forecasts predicting a sharp drop in production due to a brutal drought early this year and late in 2008.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly lower, moving in unison with soybeans. The markets backpedaled off recent gains, but soymeal still managed to gain product share on spreads. End-of-week positioning and outlooks for sluggish domestic demand for both meal and oil aided the markets weaknesses, traders said.

 

In pit trades, speculative fund selling was estimated at 1,000 lots in both soyoil and soymeal.

 

May oil share ended at 35.28%. The May crush ended at 64 cents.