November 13, 2008
CBOT Soy Review on Wednesday: Stumble; outside markets trump commercial buys
Soybean futures on the Chicago Board of Trade stumbled Wednesday for the second consecutive day, declining on speculative sales attributed to outside market weakness in the face of economic uncertainty.
CBOT November soybeans ended 22 3/4 cents lower at US$8.85 1/4 a bushel, January soybeans finished 21 cents lower at US$8.95.
December soymeal settled US$3.10 lower at US$266.40 a short tonne. December soyoil finished 115 points lower at 32.58 cents a pound.
The influence of outside markets remained a dominant factor in the marketplace, with recessionary fears curtailing buying interest despite bullish underlying fundamental features, analysts said.
Two-sided trade was achieved during the session, with futures finding support from commercial buying on solid export demand and technical strength tied to active contracts' ability to test and hold support near last week's lows, said Brian Hoops, president of Midwest Market Solutions.
Mild support was also received from talk of China buying cargoes of soybeans on the world market and forecasts for smaller Chinese soy production.
China's grain think tank Wednesday cut its forecast for the country's soybean output this year by 1 million metric tonnes to 16.50 million tonnes.
Nevertheless, weakness in crude oil, declines in the stock market and a firmer U.S. dollar kept a lid on advances and subsequently uncovered selling pressure to firmly plant prices in negative territory, analysts added.
A stronger dollar gives foreign countries less buying power to import U.S. commodities.
The USDA's weekly export sales report normally released Thursday will be delayed until Friday at 8:30 a.m. EST because the federal government was closed Tuesday for the Veterans Day holiday.
Soy product futures ended lower, with soyoil the downside leader on the bearish influence of lower crude oil futures. Soymeal ended but managed to gain product share on spreads, and briefly climbed into positive territory on spillover from soybeans and underlying commercial buying.
December oil share ended at 39.16% and the November/December crush ended at 54 3/4 cents.
Speculative fund selling was estimated at 2,000 lots in soyoil and 1,000 lots in soymeal.