December 5, 2008
CBOT Soy Review on Thursday: Sets new lows; bearish market psychology
Soybean futures on the Chicago Board of Trade stumbled to new contract lows Thursday, succumbing to speculative sales as bearish market psychology dominated once again.
CBOT January soybeans finished 19 cents lower at US$8.11.
January soymeal settled US$1.20 lower at US$245.50 per short tonne. January soyoil finished 108 points lower at 29.50 cents per pound.
The combination of weakness in outside markets, lower-than-expected weekly export sales, technical pressure and a lack of positive news sent buyers running for cover, said Jack Scoville, analyst with Price Futures Group in Chicago.
The market lacked supportive features to underpin prices, with declines accelerating once chart support at Wednesday's lows was penetrated.
Overall activity was quiet, with the absence of buyers easing the path for downward movement, traders said. The defensive tonnee is expected to linger in the near term amid global economic uncertainty, with concerns economic woes may damp demand for U.S. exports, traders added.
The U.S. Department of Agriculture reported total weekly soybean export sales were a net 364,500 metric tonnes for the week ended Nov. 27. Sales for 2008/09 were a net 359,800 metric tonnes, a marketing year low. Analysts had forecast sales between 500,000 and 700,000 metric tonnes.
DTN Meteorlogix weather said forecast models indicate no rainfall over Argentina and southern Brazil in the next five days. Argentina crops will have very little stress due to recent improvement in soil moisture because of rain in the last two weeks. However, southern Brazil faces some dry-weather stress to early row-crop progress because of prevailing dry conditions.
In pit trades, speculative fund selling was estimated at 3,000 lots.
Soy product futures ended lower, with soyoil the downside leader. Soyoil futures tumbled to new contract lows, succumbing to speculative led selling amid weakness in world vegoil markets, falling crude oil prices, larger revised Census stocks and higher Canadian canola production, analysts said.
The U.S. Census Bureau Thursday raised its October soyoil stocks estimate to 2.404 billion pounds, up from its preliminary estimate of 2.384 billion pounds, according to the Census Bureau's Fats and Oils stocks report.
Soymeal futures ended lower, but decent weekly export sales and weakness in soyoil on meal/oil spreads limited losses, traders said.
January oil share ended at 37.14% and the January crush ended at 53 1/2 cents.