November 29, 2008
CBOT Soy Review on Friday: Pressure by stronger US dollar dominates
Last-minute buying interest helped Chicago Board of Trade soybean futures pare losses in Friday's abbreviated trading session.
The strength of the U.S. dollar was the dominant influence on crude oil and, by extension, the grain and soybean markets, traders said. Month-end, position-squaring activity was also featured throughout the day.
January soybean contracts finished down 3 cents a bushel to close at US$8.83, in line with the 10-day moving average. The contract traded in a 13-cent range on low volume. The high was US$8.84. March soybeans dropped 3 cents to close at US$8.91. It traded an 11-cent range, topping at US$8.91.
Midday estimates pegged speculative fund selling at 1,000 soybean contracts.
"As the new month begins, [soy]beans will continue to be influenced by outside markets but will slowly start to focus on South American weather with this weekend's rainfall totals an important note on Monday's highlight reel," said Kim Rugel, an analyst at Benson Quinn Commodities.
Total U.S. export sales of soybeans equaled 781,600 metric tonnes for the week ended Nov. 20, according to a report issued Friday by the U.S. Department of Agriculture.
Analysts expected U.S. soybean export sales to total 500,000-800,000 metric tonnes. Week-earlier sales totaled 790,900 metric tonnes.
China continues to be a strong buyer as U.S. products are better-priced than the country's domestic supply.
The U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday at 11 a.m. EST.
Traders expect the nearby contract to range US$8.50-US$9.50 through the end of the South American growing season, a trader said.
Northern Argentina this weekend should receive some of the rain that's replenished the country's other growing areas, said T-Storm Weather President Mike Tannura.
"Rain will not be a critical issue for the country next week due to widespread heavy rain in recent days -- and especially over the last 12-18 hours," Tannura said.
"Mato Grosso do Sul, Paraguay, and South Brazil will experience a few thunder storms early next week, but widespread and heavy rain is unlikely," he added. "Therefore, dryness that began 2-3 weeks ago here will continue with more rain needed to follow beyond next week. Dryness issues for Mato Grosso and Goias are not expected."
CBOT soy products closed mixed.
December soymeal settled near the bottom of its US$12 trading range, notching a US$7.20 loss, closing at US$256 per short tonne.
Soymeal export sales were lower than expected, totaling 59,700 metric tonnes. Analysts expected 100,000-125,000 metric tonnes, according to the Linn Group.
Soyoil sales were 17,100 metric tonnes, above the 5,000-10,000 estimate range collected by the Linn Group.
December soyoil gained 8 points to close at 32.58 cents per pound.
Speculative fund activity was termed even in soymeal lots. Soyoil selling was estimated at 1,000 lots, according to midday estimates.
December oil share ended at 38.55% and the January crush ended at 36 1/4 cents.