November 26, 2008
CBOT Soy Review on Tuesday: Soy lower on outside markets, profit-taking
After a choppy trade influenced by weakness in equities, crude oil and the U.S. dollar, nearby Chicago Board of Trade soybean futures closed 1-2 cents lower Tuesday.
Traders and analysts also pointed to profit-taking followed by what some termed an "overdone" rally Monday. January soybean contracts slipped 1 cent a bushel to close at US$8.83. The trade ranged from US$8.71 to US$8.92. March soybeans lost 2 cents to close at US$8.91 1/2. The contract spread a 19-cent range, topping at US$9.
Midday estimates pegged speculative fund purchases at 2,000 soybean contracts.
There was "not enough news to push the [grain and soy] markets higher," a CBOT floor trader said.
Crude oil's weakness overrode the traditionally supportive effects of a weaker dollar, the trader said.
A light trade is expected for the rest of the week due to Thanksgiving, he added.
The "trade is starting to become cautiously optimistic that the lows are now in for the commodity and equity markets after Friday's late turnaround," noted Kim Rugel, an analyst at Benson Quinn Commodities, in a market commentary.
But, she added, any rally attempts from here will be limited until confidence has been restored in the crude oil and equity markets and more is known about South American production.
Rugel and traders both noted talk of continued U.S. soybean purchases by China.
Basis for spot barge soybean shipments to the Gulf slipped 4 cents per bushel, according to a report issued Tuesday by the U.S. Department of Agriculture.
The U.S. October soybean crush is expected to total 151.1 million bushels, according to the average estimate of analysts surveyed by Dow Jones Newswires.
On average, the analyst predicted an increase from the September crush figure of 125.7 million bushels.
The U.S. Census Bureau's monthly crush report is scheduled for release Wednesday at 8 a.m. EST.
CBOT December soymeal contracts exhibited the most strength among neighboring markets Tuesday.
It settled US$4.80 higher at US$262.50 per short tonne.
Fundamental demand support for meal was seen as end users stepped up for purchases, a CBOT floor trader said.
Soyoil, however, was driven down by crude oil's slide, the trader said.
CBOT December soyoil contracts shed 50 points to close at 32.24 cents per pound.
Funds bought an estimated 1,000 soymeal lots and sold 2,000 soyoil lots, according to midday estimates.
December oil share ended at 38.05% and the January crush ended at 52 1/2 cents.