November 12, 2008
CBOT Soy Review on Tuesday: Soy bows to outside-market forces
Cloudy outside markets depressed Chicago Board of Trade nearby soybean futures, but the spot contract managed to push back above US$9 late in Tuesday's trading session.
November soybean contracts dropped 32 cents a bushel to close at US$9.08, off the day's US$8.93 low. The contract traded in a 16-cent range. January soybeans mirrored November's 32-cent losses, closing at US$9.16. It recovered from a US$8.98 low, moving closer to the top of its 25-cent range.
Midday estimates pegged speculative fund selling at 3,000 soybean contracts.
Light retracement of earlier outside-market losses eased the pressure on soybeans.
A stronger U.S. dollar, bleak economic forecasts expressed in weakness in equities and crude oil turmoil remain the leading drivers of the market, analysts said.
However, futures remain in a broad-based trading range for the fifth consecutive week, with strong underlying demand and tight farmer holding of supplies keeping a floor beneath prices, said Greg Wagner, AgResource analyst.
Deliveries continue against the CBOT November soy contract, which is set to expire Friday.
Current demand pressure is adding fundamental support and keeping prices planted in a sideways trading range.
Thoughts of slowing world protein demand offers upside resistance to soybean futures, said ADM Investor Services.
"This despite [the U.S. Department of Agriculture] lowering their Brazil 2009 soybean production estimates, China buying soybeans and improved soyoil demand in Brazil and China," the investment firm said.
SOY PRODUCTS
The CBOT soy complex dropped in line with losses in neighboring markets, crude oil and equities.
December soymeal settled US$1.28 lower at US$265 per short tonne. January 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 2,000 soyoil lots, while soymeal trading was seen as even, according to midday estimates.
