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CBoT Soybean Settles Down On Profit-Booking, Demand Concerns

15 Feb 2020 8:13 am
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Mumbai (Commodities Control) – Chicago Board of Trade soybean futures closed lower on Friday on profit-taking after a nine-session advance in the nearby March contract and uncertainty about export demand for U.S. supplies, traders said.

Also, USDA’s long-term projection estimates of soybean planting acreage at 84 million for 2020, with the following years climbing to 86 million. They estimate a 3.46% increase to 20/21 soybean exports. Meal and oil exports are projected to decline in20/21 before picking back up in the long term. Prior to the NOPA report release next Tuesday, traders estimate 173.75 mbu of soybeans crushed by NOPA members during January.

CBOT March soybeans settled down 2-1/2 cents at $8.93-3/4 per bushel, turning lower after the contract failed to match Thursday's high of $8.99-3/4. May Soybeans closed at $9.03 1/4, down 2 3/4 cents. July Soybeans closed at $9.15 1/2, down 2 1/2 cents. August Soybeans closed at $9.19 1/4, down 2 1/2 cents.

For the week, the contract rose 11-3/4 cents a bushel, or 1.3%, its second straight weekly rise.

CBOT March soymeal ended down 80 cents on Friday at $291.10 per short ton and March soyoil fell 0.15 cent to finish at 30.57 cents per pound.

Traders noted fears that logistical problems tied to the coronavirus in China might hamper export business.

Ships carrying refrigerated cargo containers of chicken from the United States to China are being diverted to ports in Hong Kong, South Korea, Taiwan and Vietnam due to the coronavirus outbreak, according to a U.S. poultry export trade group.

Traders are waiting to see if China steps up purchases of U.S. agricultural products as the U.S.-China Phase 1 trade deal takes effect this weekend.

Brazilian oilseeds industry group Abiove raised its forecast of Brazil's 2019/20 soybean crop to 123.7 million tonnes, from 122.8 million in January.

South America continues to make good progress with weather and harvest moving forward with little change on the horizon. The Brazilian Real remains very cheap as well hurting U.S. export competitiveness near term but has gained this morning with trade still awaiting a trend change.

Meanwhile, commodity funds were net sellers of Chicago Board of Trade soybean, soymeal and soyoil futures contracts on Friday, traders said.

The Commitment of Traders report showed managed money was more net short wk/wk to 92,172 contracts. Speculative traders’ open interest was up 14,274 contracts with the majority as new shorts. On Tuesday, managed money was more net short in soybean meal as well. The OI was higher, and managed money meal traders were at their strongest net short on record, which is 68,150 contracts.

Soybean oil spec traders were less long in the weekly update. There was new selling and long liquidation noted.
Support and Resistance for the active contract lies at $8.85/Bushel and $9.03/Bushel, respectively.

(Commodities Control Bureau)

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