December 16, 2008


CBOT Soy Review on Monday: Stumbles, succumbs to crude weakness



After chopping around on both sides of unchanged levels, soybean futures on the Chicago Board of Trade ended lower Monday, succumbing to spillover pressure from a retreat in crude oil.


CBOT January soybeans finished 8 cents lower at US$8.46.


January soymeal settled 90 cents lower at US$256.80 per short tonne. January soyoil finished 37 points lower at 30.55 cents per pound. The market finished down as crude oil broke lower, with weakness in equities and an uncertain economic climate keeping buyers cautious, said Jack Scoville, analyst with Price Futures Group in Chicago.


Talk of a potential jump in 2009 U.S. soybean acreage added pressure, while South American crop and weather issues remained supportive, but the trade continues to be influenced by macroeconomic features.


Otherwise, futures had little fresh news to direct prices, leaving the market choppy, as participants scale back trading activities heading into the end of the year, Scoville added.


The DTN Meteorlogix weather forecast said only light precipitation is in store for row-crop areas of southern Brazil this week. This drier trend is causing some concern for soybean moisture in Rio Grande do Sul, the third-largest soybean producer in Brazil.


Argentina's major corn and soybean areas look to remain drier and warmer than normal during the next 10 days. This is an unfavorable weather trend, due to the pattern reducing available soil moisture for corn and soybean crops, Meteorlogix added.


U.S. soybeans inspected for export in the week ended Dec. 11 totaled 34.398 million bushels. Analysts surveyed by Dow Jones Newswires anticipated inspections in a range of 35 million to 40 million bushels. The primary destination for the soybeans was China, which accounted for 31.073 million bushels.


In pit trades, speculative fund selling was estimated at 1,000 lots.





Soy product futures stumbled in unison with soybeans, with soyoil erasing early gains on late spillover pressure from crude oil declines. Soymeal ended mixed, garnering pressure from soybeans while optimistic outlooks for a pick demand amid freezing Midwest temperatures and meal/oil spread adjustments provided support.


In pit trades, speculative fund selling was estimated at 1,000 lots in soyoil.


January oil share ended at 37.3%, and the January crush ended at 55 cents.


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