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Soybeans end mixed on nearby profit-taking

05/24/2013 @ 2:22pm

U.S. soybean futures finished mixed Friday, with the spot July contract slumping as traders took profits after prices rallied to eight-month highs Thursday.

Chicago Board of Trade soybeans for July delivery, the most actively traded contract, finished down 23 1/4 cents, or 1.6%, at $14.76 1/4. The November soybean contract settled up 4 3/4 cents, or 0.4%, to $12.47 3/4.

Heading into trading Friday, July soybean futures had risen 3.5% for the week and some market participants decided to book profits in an attempt to shed some risk ahead of the extended holiday weekend, analysts said.

CBOT markets will be closed Monday in observance of the Memorial Day holiday.

When prices rally to lofty levels, traders will take some profits to the bank, said Hugh Whalen, commodity risk consultant with advisory firm MIDCO Commodities in Bloomington, Ill.

Contracts for near-term delivery were pressured by weakness in cash basis levels at many grain terminals across the Midwest. "Basis" refers to the gap between futures and cash prices for physical soybeans.

The decline in the premium in cash prices over futures is occurring as soy processors are dropping their cash bids to account for the recent increase in farmers selling stored stockpiles from last autumn's harvest.

Cash grain merchants in central Illinois, a major grain-processing area, were paying 65 cents a bushel above CBOT July soybean futures, down 30 cents from Thursday and down 70 cents from the same time last week.

The futures market is catching up to the big declines in the cash market for physical supplies, said Jim Gerlach, president of advisory and brokerage firm A.C. Trading in Fowler, Ind.

Traders were also concerned about a possible slowdown in export demand amid talk that China was canceling some previously purchased supplies from Brazil.

The cancellations weren't confirmed, but ahead of a long weekend, traders are worried it could signal China has overbooked purchases and will wait for cheaper supplies down the road, Mr. Whalen said.

"New-crop" futures--those such as the November contract that represent supplies that will be harvested in autumn--were higher, supported by traders taking profits on prior bets that contracts for near-term delivery would advance at the expense of contracts for delivery later in the year.

U.S. wheat futures settled lower Friday, slumping as traders take profits off the table after prices rallied over 2% Thursday. Traders reduced risk ahead of the long weekend as private forecasters predicted some improved weather conditions for drought-stressed crops in the Great Plains.

July wheat futures ended down 5 3/4 cents, or 0.8%, at $6.97 1/2 a bushel at the CBOT. Kansas City Board of Trade July wheat dropped 8 3/4 cents, or 1.2%, to $7.45 3/4 a bushel. MGEX July wheat finished down 7 1/2 cents, or 0.9%, at $8.05 3/4 a bushel.

Corn futures ended mixed, as traders took a cautious approach ahead of the weekend amid uncertainty over the rate of planting for the U.S. crop, which started slowly due to a cold spring but has since proceeded at a rapid pace.

CBOT corn for July delivery, the most actively traded contract, finished down 4 3/4 cents, or 0.7%, at $6.57 1/4 a bushel. The December contract settled up 1 3/4 cents, or 0.3%, to $5.36 1/2.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
May 24, 2013 15:13 ET (19:13 GMT)
DJ Soybean Futures End Mixed; July Contract Tumbles on Lower Cash Prices->copyright


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