November 14, 2008
CBOT Soy Review on Thursday: Mostly lower; spreads, economic uncertainty
Soybean futures on the Chicago Board of Trade ended mostly lower Thursday, pressured by a combination of grain/soybean spreading and economic uncertainty affecting demand and acreage potential, analysts said.
CBOT November soybeans ended 1 3/4 cents higher at US$8.87 a bushel. January soybeans finished 1 cent lower at US$8.94.
December soymeal settled US$2.40 lower at US$264.00 per short tonne. December soyoil finished 23 points higher at 32.81 cents per pound.
Grain/soybean spreading influenced price action. The spreads were encouraged by the current economic picture, which has tilted planting outlooks toward soybeans versus grain for next year, said Dan Basse, president AgResource Company in Chicago.
The weakness in prices could also be an indication that demand is possibly cooling off, with domestic demand for meal slowing and news of fresh buying from China quiet this week, said John Kleist, broker/analyst with Allendale Inc.
Two-sided trade plagued futures as well, with mixed signals from outside markets keeping futures holding within a recent sideways trading range. Lingering recessionary fears limited aggressive activity, with technical activity featured as well.
In pit trades, speculative fund selling was estimated at 3,000 lots.
On tap for Friday, the U.S. Department of Agriculture at 8:30 a.m. EST will issue its weekly export-sales report. Soybean sales are estimated at 500,000 to 800,000 tonnes. Soymeal sales are projected in a range of 75,000 to 125,000 metric tonnes, with soyoil sales expected in a zero-to-10,000-tonne range.
The National Oilseed Processors Association will release its monthly soybean crush report for October Friday at 8:30 a.m. EST. Soybean crush rates for October are expected to increase to about 140.9 million bushels, according to a survey of industry analysts. Estimates for the report ranged from as low as 134.6 million bushels to as high as 147.0 million bushels. In the previous report, crush for the month of September was measured at 120.4 million bushels.
NOPA soyoil stocks in October are expected to increase 34 million pounds to 2.022 billion pounds from the 1.988 billion reported in September. Estimates ranged from as low as 1.943 billion pounds to as high as 2.188 billion pounds.
Soy product futures ended mixed, with soyoil gaining product share on spreads. Two-sided activity in crude oil futures produced similar action in soyoil, with futures ending higher on late speculative buys and outside market influences, analysts say. Soymeal futures ended lower, retreating with soybeans, while talk of slowing demand and an increase in the crush applies pressure.
December oil share ended at 38.32% 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.