December 10, 2008
CBOT Soy Review on Tuesday: Ends lower, consolidating Monday's rally
Chicago Board of Trade soybean futures ended lower Tuesday, consolidating after Monday's rally from contract lows.
CBOT January soybeans finished 7 1/2 cents lower at US$8.13.
January soy meal settled US$2.90 lower at US$244.80 per short tonne. January soyoil finished 4 points higher at 29.81 cents per pound.
Two-sided action plagued futures in early action, as the absence of fresh fundamental news and mixed signals from outside markets left futures struggling to find direction, analysts said.
As the day unfolded, falling stock index and crude oil futures along with a firmer U.S. dollar sent negative waves through the market, opening the door for prices to drift lower. Consolidative activity was featured, with the most active January future trading in the same trading range as Monday's day session (US$8.11-US$8.27).
Otherwise, futures had little directives to generate momentum, with many traders unwilling to take on added risk in the face of economic uncertainty, analysts said. Looking ahead, traders said futures would find it tough to rally without outside support or some strong fundamental news to underpin prices.
Light position evening ahead of Thursday's U.S. Department of Agriculture supply and demand reports aided the consolidative theme as well.
The average of analysts estimates in a Dow Jones Newswires survey pegs 2008-09 U.S. soybean ending stocks at 200 million bushels, down 5 million from November's forecast. The estimates ranged between 161 million and 215 million bushels.
Soy product futures ended mixed, with soyoil managing to divorce itself from weakness in the rest of the complex. Realignment of meal/oil spreads and underlying commercial buying served as the catalyst to bolster advances in soyoil, analysts said. However, late weakness in crude oil applied pressure to trim advances down the stretch, a CBOT floor trader said.
In pit trades, speculative fund and commercial buying was estimated at 1,000 lots each in soyoil.
January oil share ended at 37.56% and the January crush ended at 53 1/2 cents.