CBOT soybeans end lower on technicals, but soyoil soars

Thursday, 03 January 2013 03:55

Posted by Abdul Ahad

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CHICAGO: Soybean futures on the Chicago Board of Trade erased early gains and closed down 1.2 percent on Wednesday, posting a one-month low on technical selling, while soyoil soared, traders said.

* Grains and soy turned lower as the US dollar index rallied amid fading euphoria over a last-minute deal in Washington to avert the "fiscal cliff" of tax hikes and spending cuts. A stronger dollar makes dollar-denominated commodities including soybeans less competitive on the world market.

* CBOT soyoil jumped nearly 3 percent, its biggest daily rise since August, after lawmakers included an extension of the $1 a gallon tax credit for soy-based biodiesel as part of their massive fiscal pact.

* CBOT March soymeal fell 3.3 percent, plunging below its 200-day moving average on the way to a one-month low, as traders unwound meal/oil spreads.

* Funds hold a large net short position in soyoil, leaving that market vulnerable to short-covering.

* Crop weather in South America is mostly satisfactory, with pockets of dryness and pockets of extreme wetness leading to some concern about crop planting and growth - MDA EarthSat Weather.

* CBOT reported nine soymeal deliveries against the January contract, along with 3,034 soyoil deliveries and no soybean deliveries.

Center>Copyright Reuters, 2013