CHICAGO (Dow Jones)--U.S. soybean futures ended with a steady-to-firm undertone Wednesday, settling well off early highs as traders booked profits in an effort to reduce risk exposure.
The Chicago Board of Trade January soybean future, the most active contract, ended 1/2 cent or 0.04% higher at $12.96 1/2 a bushel, and the March futures settled up 1 3/4 cents or 0.1% at $13.07 3/4.
The market's early gains were extended a little too fast, lacking the fresh fundamental support to attract buyers to sustain the gains, said Rich Nelson, director of research at Allendale Inc., an advisory and brokerage firm in McHenry, Ill.
Ongoing dry weather issues for Argentina soybean crop areas afforded the market initial strength, as did news of fresh Chinese buying of soybeans for delivery in the 2011-12 marketing year.
In general, Argentina dryness is supportive, but after a one-month rally on Argentina worries, traders are becoming cautious, taking a wait-and-see approach with rain showers forecast for the region during the weekend, Nelson said.
Brazil and Argentina are the world's second and third largest producers of soybeans behind the U.S. It is a necessity for South America to raise large crops this year to meet growing world demand, and the slightest indication they will not causes futures buying as a result.
The absence of additional fresh news promoted a choppy theme, with traders looking to reduce risk exposure in the last full trading week of the year. A rally in the U.S. dollar added further pressure to cap advances as well.
SOY PRODUCTS
Soy product futures ended mixed, with soymeal rallying on supportive outlooks for increased protein feed demand resulting from cold, snowy central U.S. weather conditions, analysts said. Soyoil futures stumbled for the second consecutive day, succumbing to profit taking pressure as traders booked profits after prices rallied in the past month, analysts said. However, supportive export demand and optimistic outlooks for the reinstitution of U.S. biodiesel tax credits limited price pressure.
CBOT January soyoil ended 0.89 cents or 1.6% lower at 54.20 cents per pound, and January soymeal traded $3.90 or 1.1% higher at $346.10 a short ton. January oil share was 43.92%, while the January soybean crush margin ended at 61 cents.
