August 15, 2008
CBOT Soy Review on Thursday: Settles lower; corrects as usage wanes
Chicago Board of Trade soybean futures settled lower Thursday, backpedaling on corrective sales from Wednesday's rally and bearish domestic and export usage data.
August soybeans settled 24 1/2 cents lower at US$12.45 1/2 and November soybeans ended 10 cents lower at US$12.74.
December soymeal settled US$4.50 lower at US$347.50 per short tonne. December soyoil finished 38 points lower at 52.90 cents per pound.
The combination of favorable near-term weather for Midwest crops, and lower-than-expected crush and export sales data weighed on prices, said John Kleist, broker/analyst with Allendale Inc.
"There's nothing to suggest that an early frost will occur, and demand from domestic and export usage has turned sloppy, leaving little incentive for buyers to continue to push prices," Kleist added.
Weekly export sales and monthly crush figures came in below trade expectations, reflective of usage struggling heading into the end of the marketing year. Analysts are beginning look for the government to cut its crush forecast, making it hard for prices to defy downward pressure.
A technical analyst said the most-active November contract is still in a five-week-old downtrend from the contract high of US$16.36 3/4, scored in early July. It will take a move above the last reaction high in November soybeans, located at US$14.21, to fully negate the downtrend on the daily bar chart.
There is strong technical resistance for November soybeans located at Thursday's high of US$13.07 and then at US$13.50. Above that lies major psychological resistance at US$14.00 a bushel, he added.
Otherwise, spreads corrected ahead of the August expiration, with November futures moving just shy of a 20-cent carry amid new crop uncertainty and waning demand for old-crop supplies, Kleist said.
Nevertheless, with much uncertainty lying ahead for the late developing 2008 soybean crop, futures found support to trim steep early gains.
August soybeans ended with little fanfare, expiring at 1 p.m. EDT.
The National Oilseed Processors Association says 133.034 million bushels of soybeans were crushed in July, down from 133.513 million in June and below the average analyst estimate of 138.5 million. Soyoil stocks were pegged at 2.367 billion bushels, down from 2.449 billion, and below the average analyst estimate of 2.376 billion.
The U.S. Department of Agriculture reported total weekly soybean export sales were a net 69,500 metric tonnes. Analysts had forecast sales between 200,000 and 600,000 metric tonnes. Net sales for the 2007-08 crop year resulted in a net sales reduction of 49,700 tonnes for the week ended Aug. 7. Sales for the 2008-09 marketing year were 119,200 tonnes.
Soy product futures stumbled, retreating in step with the corrective theme in the neighboring soybean market. The absence of fresh supportive news to extend Wednesday's limit-up price moves attracted selling amid ideas the gains were overdone, analysts said. However, soyoil did garner support from support stocks estimates in the crush report and friendly weekly export sales, analysts added.
December oil share ended at 43.22% and the November/December crush ended at 72 1/2 cents.
Speculative fund selling was estimated at 2,000 lots in soymeal, and 3,000 lots in soyoil.