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CBOT soya products end mostly lower as soya fades

CHICAGO: Soya product futures at the Chicago Board of Trade finished mostly lower on Wednesday as corrective pressures and a mild easing in South American weather concerns burdened the soya complex, traders said.

Soyameal settled 20 cents per ton higher to 60 cents lower, with March down 10 at $159.30 after rising as high as $160.80 early for the contract's highest price since $161.50 on Oct. 13.

Soyaoil settled 0.05 cent per lb higher to 0.19 lower, with March down 0.19 at 16.34 cents, after reaching a six-week high of 16.77 early. Overall CBOT activity was fairly light, traders said.

CBOT soyabeans fell in part due to some forecasts for cooler temperatures and improved rainfall chances for the southern part of Brazil's soyabean belt by the weekend.

Conditions until then were still expected to be mostly dry, likely causing further stress for soyabean acreage, meteorologists said. Crops in Argentina and southern Brazil have suffered from below-normal rainfall since the start of planting in October and November.

The CBOT soya complex appeared to be overbought technically and due for a pullback after rising sharply over the past week, traders said.

On Tuesday, March meal closed at $159.30, marking a jump of $9.10 since Jan. 11.

The steep price run-up may by putting a damper on domestic demand for meal, said Robert Lekberg, grain and oilseed analyst for Goldenberg, Hehmeyer & Co. in Chicago. He argued that although the government reduced its stocks outlook for U.S. soyabeans, supplies were still relatively abundant, meaning meal buyers - primarily livestock feeders - don't necessarily have to scramble to secure inventory.

"Anything over $160 is going to hold in March contracts," Lekberg said. "Nobody wants it. We've got more than enough meal, and even though supplies have tightened up, we've got enough soyabeans."

"Demand will be shut off domestically on anything over $160," he continued. "I think it's being shut off now."

Soyaoil climbed initially Wednesday with support from gains overnight in prices for Malaysian palm oil. Palm oil competes with U.S. soyaoil for global vegetable oil business, and prices for each often move in the same direction.

Despite strength in palm oil, traders said the palm market anticipated bearish crop data scheduled for release Thursday from Malaysia's Palm Oil Registration and Licensing Authority. On Tuesday, private forecaster Ivan Wong released upwardly revised production and stocks figures for December.

Product markets ended lower despite modest net buying by commodity funds. Funds bought 1,500 meal contracts and 600 soyaoil up to late trading, floor sources said.

Cargill sold 700 March soyaoil contracts and 400 May, Iowa Grain sold 700 March, Salomon Smith Barney Inc. bought 600 May and sold 300 March and E.D. & F. Man bought 800 May and sold 300 March.

In meal, TENCO Commercial Grain sold 200 March and Iowa Grain bought 200 March.

Soyameal volume during Wednesday's pit session was estimated by the CBOT at 20,000 contracts, compared with 25,131 Tuesday. Soyaoil volume was estimated at 32,000 contracts, compared with 16,398 Tuesday.-Reuters