September 19, 2008

 

CBOT Soy Review on Thursday: Stumbles on speculative liquidation, economic woes

 

 

Chicago Board of Trade soybean futures stumbled Thursday, succumbing to speculative long liquidation, as lingering economic turmoil continues to pull buyers from the market, analysts said.

 

November soybeans ended 23 cents lower at US$11.16.

 

December soymeal settled US$8.90 lower at US$313.80 per short tonne. December soyoil finished 48 points higher at 44.90 cents per pound.

 

The gyrations of outside markets were the focal point of grain and oilseed futures. The absence of fresh fundamental news amid assumptions there won't be a decent yield assessment for weeks to come kept many buyers on the sidelines, analysts said.

 

Traders' appetites for soybeans have diminished, with the market torn between declines in crude oil and strength in precious metals during the session.

 

Bearish near-term weather outlooks for late-developing Midwest crops and harvest activities in the southern crop belt added some pressure, with a general lack of buying interest helping keep prices firmly planted in negative territory, analysts added.

 

Nevertheless, tight nearby supplies and the uncertain future of yields remain supportive factors, but in the face of global economic turmoil, the market is seen struggling to sustain rallies without a boost from outside markets, a CBOT floor broker said.

 

Late-week weather conditions over the central U.S. are generally favorable in the DTN Meteorlogix forecast. Dry weather for at least the next five days, along with mostly above-normal temperatures, will help fields recover from recent rains and help crops continue moving toward maturity. Shower threats later in the period are mostly for the western Midwest, but there is no significant cold weather in sight, Meteorlogix added.

 

Going into the end of September, the jet-stream outlook calls for a zonal west-to-east upper-air flow, which means dry and warm weather to linger across the central part of the country through the end of September, Meteorlogix added. Both the U.S. and European models are showing this feature, which brings a high level of confidence to the forecast.

 

In pit trades, speculative fund selling is estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil bouncing higher on support from traders taking profits on short positions, analysts said. The market has sold off aggressively in recent sessions, and finally generated some short covering, with the unwinding of meal/oil spreads, analyst added.

 

Soymeal stumbled in unison with soybeans, carving out a four-month low on speculative long liquidation attributed to outside forces as tight nearby supplies remain supportive.

 

December oil share ended at 41.71% and the November/December crush ended at 68 1/4 cents.

 

Speculative fund selling was estimated at 1,000 lots in soymeal, while speculative funds were estimated sellers of 2,000 lots in soyoil.