September 5, 2008

 

CBOT Soy Review on Thursday: Retreat continues; supportive news scarce

 

 

Chicago Board of Trade soybean futures ended lower Thursday, extending the market's recent downward trend amid an absence of fresh supportive news.

 

September soybeans settled 17 cents lower at US$12.34 and November soybeans ended 16 1/2 cents lower at US$12.35.

 

December soymeal settled unchanged at US$342 per short tonne. December soyoil finished 100 points lower at 50.24 cents per pound.

 

Weakness in crude-oil futures coupled with a stronger U.S. dollar continued to attract speculative selling in the absence of fresh market-moving features, said Mario Balletto, analyst with Citigroup in Chicago.

 

Rains moving through the central Midwest are seen benefiting late-developing soybean crops, helping aid the defensive tonnee, traders said.

 

Otherwise, activity was light, with choppy activity seen during the day. However, despite the lower tonnee, futures failed to challenge Wednesday's lows, and with lingering uncertainty tied to the 2008 crop, downside pressure remained limited.

 

Worries over crop losses in the U.S. Delta from heavy rains associated with remnants of former hurricane Gustav and an already tight stock situation served as underpinning features limiting losses as well, traders said.

 

The DTN Meteorlogix forecast said rainfall of up to 3 inches and locally heavier was expected for most of Illinois, southeast Wisconsin, northwest Indiana and southwest Michigan through Thursday. Because of the late start to the row crop season this year, filling crops may still benefit from rain, Meteorlogix added.

 

Meanwhile, over the next week, a generally below-normal temperature trend will continue in the western U.S. Midwest. This cool temperature pattern is a source of concern for crop maturation, due to some significant lagging in progress, Meteorlogix said.

 

On tap for Friday, the U.S. Department of Agriculture at 8:30 a.m. EDT will issue its weekly export-sales report. The report was delayed due to the Labor Day Holiday Monday. Soybean sales are estimated at 200,000 to 550,000 tonnes. Soymeal sales are projected in a range of 15,000 to 125,000 metric tonnes, with soyoil sales expected in a zero to 15,000-tonne range.

 

In pit trades, speculative fund selling was estimated at 2,000 contracts.

 

 

SOY PRODUCTS

 

Soy-product futures ended mixed, with soyoil losing product share on meal/oil spreads amid spillover weakness from crude oil, waning demand and ample nearby supplies. The most active December contract dropped to its lowest level in nine months, as speculative liquidation continues, analysts said.

 

Soymeal futures ended narrowly mixed, garnering pressure from weakness in soybeans, while spreading between the soy products managed to limit downside risks for soymeal, analysts added.

 

December oil share ended at 42.38% and the November/December crush ended at 67 3/4 cents.

 

Speculative fund selling was estimated at 2,000 lots in soyoil.