August 16, 2008
CBOT Soy Review on Friday: Stumbles on strong dollar, falling crude
Chicago Board of Trade soybean futures settled sharply lower Friday on continued strength in the U.S. dollar and outside market influences.
September soybeans settled 53 3/4 cents lower at US$12.11 1/2 and November soybeans ended 55 cents lower at US$12.19.
December soymeal settled US$14.80 lower at US$332.70 per short tonne. December soyoil finished 207 points lower at 50.83 cents per pound.
In the absence of any fresh fundamental news, the market reflected a retreat of speculative investors from commodities in general, traders and analysts said.
"There's just so much money sloshing around in these commodity markets; when one market goes they all go," said Nathan Losey, an analyst with the AgResource Co.
The U.S. dollar climbed. Crude oil dropped more than US$2 a barrel. Gold and silver were down sharply.
Active soybean contracts briefly plunged their exchange-imposed 70-cent daily trading limit amid the outside influences and weakness in Asian markets overnight.
Overall activity was subdued despite the sharp slide with one trader noting "it was the quietest almost-limit-down day in quite a while."
The absence of fresh fundamental news provided little incentive for traders to push prices higher as buyers backed away from commodities either to the sidelines or into equities, a CBOT floor broker said.
"There's really no change in the fundamentals," Losey said. "Without anything new there's nothing left to trade except for what the funds are doing."
In pit trades, speculative fund selling was estimated at 4,000 contracts.
Most of the central U.S. should see temperatures from three to 10 degrees Fahrenheit above normal through the middle of next week, DTN Meteorlogix said.
"This temperature pattern will be beneficial to crops in need of heat units during the filling and maturing stages of the season," Meteorlogix said.
Soy-product futures tumbled Friday, following a steep decline in soybeans. Both soymeal and soyoil came close to falling their daily trading limits during the session amid broad-based weakness in commodities.
The sharp slide in crude-oil futures weighed heavily on soyoil, with soymeal following closely behind price movements in soybeans.
December oil share ended at 43.31% 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.