October 16, 2008
CBOT Soy Review on Wednesday: Stumbles; outside markets lead price descent
Soybean futures on the Chicago Board of Trade ended lower Wednesday, dropping in unison with sharp losses in outside equity and crude oil markets.
CBOT November soybeans ended 38 cents lower at US$8.58 a bushel, the lowest level on continuation charts since August 2007.
December soymeal settled US$3.00 lower at US$244.50 per short tonne. December soyoil finished 247 points lower at 35.53 cents per pound.
The losses were all tied to macro economic concerns, as bearish views on stocks, currencies and crude oil sent buyers running for cover once again, said Dan Basse, president AgResource Company.
The markets are linked at the hip, with the big problem, people don't have a good handle on demand in the midst of global economic uncertainties, he added.
At the CBOT close, crude oil futures were down US$3.68 a barrel, and the Dow Jones Industrial Average was down 545 points.
A quiet news front kept outside influences the dominant issue, particularly without any near term supply concerns.
Bearish investor sentiment has placed a negative cloud over the market, as buyers lack conviction to push prices in the face of uncertain economic times, analysts added.
Looking ahead, analysts anticipate futures will continue to mirror the movements of outside markets, with fundamental analysis very difficult until stability is brought to global economies.
Meanwhile, USDA announced Wednesday that private exporters reported the sale of 120,000 metric tonnes of U.S. soybeans for delivery to unknown destinations in the 2008-09 marketing year.
The DTN Meteorlogix forecast calls for rainfall of up to 1 inch to develop during Wednesday and Thursday over the eastern Midwest. This moisture will produce some significant harvest delays across the eastern half of the Corn Belt - adding to extensive delays in the western Corn Belt due to recent heavy rains of more than 2 inches.
Temperatures during the balance of this week will trend mostly below normal across the Midwest. This lack of warmth will further slow down the drying process for fields and crops, Meteorlogix said.
Soy product futures ended lower, with soyoil tumbling to its lower daily trading limits on the close amid the bearish influence of outside markets. The continued plunge in crude oil futures and the slide in the stock market attracted speculative sales to extend soyoil's slide to its lowest level since April 2007.
CBOT soyoil will trade with expanded limits of 350 points Thursday.
Soymeal futures fell to a nearly 14 month low, but losses were limited by spreading between the products.
December oil share ended at 42.2% and the November/December crush ended at 70 1/2 cents.