November 6, 2008
CBOT Soy Review on Wednesday: Soy drops on postelection profit-taking
Chicago Board of Trade soybean futures slipped below US$9, amid weakness in equities and crude oil.
November soybean contracts dropped 56 3/4 cents a bushel to close at US$8.94 3/4, just off the day's US$8.94 low. The contract traded at a 55-cent range on low volume. January soybeans lost 55 cents to close at US$9.04. It also spread across a 55-cent range, bottoming at US$9.03.
Midday estimates pegged speculative fund selling at 3,000 soybean contracts.
"Profit-taking following Tuesday's rally has sent the market lower," said Doane Agricultural Services. "Also bearish are prereport estimates for a larger soybean crop in Monday's USDA report, which would likely lead to an increase in ending stocks."
The USDA is scheduled to release updated estimates Nov. 10 at 8:30 a.m. EST.
Soybean futures "went down a lot easier than I thought," a CBOT floor trader said.
Retracing down what it took four or five days to gain "is not a good indication of strength," he added. With weaker equities, slipping crude and a strengthening dollar, "it's getting hard to be a commodity bull," the trader noted.
Traders are also waiting for unemployment numbers to be released by the Department of Labor at 8:30 EST Friday.
"If [unemployment] is below 250,000 it will be OK," a CBOT floor trader said. If the number falls below 280,000 or 300,000, commodity prices will be hit, he added.
"People are worried about losing jobs," he said.
The CBOT soy complex dropped in line with losses in neighboring markets, crude oil and equities.
"Meal seems stronger on the breaks; world protein demand is still relatively strong," a CBOT floor trader said.
Dec soymeal settled US$1.28 lower at US$265 per short tonne. Jan soymeal dropped US$1.29 to US$266.80. December soyoil shed 195 points to close at 34.02 cents per pound.
Funds sold an estimated 1,000 soymeal lots and 2,000 soyoil lots, according to midday estimates.
December oil share ended at 39.09% and the November/December crush ended at 62 1/2 cents.