January 5, 2007

 

CBOT Soy Review on Thursday: Pressure felt from weaker crude oil

 

 

Chicago Board of Trade soybeans futures finished lower Thursday under pressure from weaker energy prices, analysts said.

 

January soybeans ended down 6 1/2 cents at US$6.62 3/4 a bushel, and March closed down 6 1/2 cents at US$6.75 1/2. March soymeal settled 90 cents higher at US$193.30 per short tonne, while March soyoil ended 43 points lower at 28.65 cents a pound.

 

CBOT soybean futures traded lower early in the day session on follow-through selling from Wednesday, weaker outside markets and on favorable crop weather in South America, sources said. Soybeans temporarily recovered, however, and moved into positive territory as bargain hunters entered the market, a CBOT floor broker added.

 

CBOT soybean futures returned to the downside as commodities in general started showing broad weakness near the end of the session, sources noted. Soybeans, in particular, felt pressure from weaker crude oil futures prices, an analyst said.

 

"Copper and crude oil are being looked at as being oversupplied," said Mike Zuzolo of Risk Management Commodities Inc. "That's going to spill over into any energy commodity."

 

Favorable weather for soybeans in South America was also bearish, a CBOT floor broker said. In Argentina's central soybean belt, a drier weather trend is in store through most of next week, although stress from the trend is expected to be minimal because soil moisture has been generous so far, the DTN Meteorlogix weather firm said.

 

Temperatures, however, may dip notably below normal during the latter part of next week, which could bring a bit of shock to the crops, Meteorlogix added.

 

In Brazil, meanwhile, the entire soybean belt continues to have favorable crop weather, the firm noted.

 

Weekly export sales figures normally due out Thursday will be released Friday due to the New Year's holiday.

 

Analysts surveyed by Dow Jones Newswires predicted U.S. weekly soybean export sales between 400,000 and 700,000 metric tonnes for the week ended Dec. 28. Sales for the week ended Dec. 21 totaled 1,037.4 million tonnes.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed.

 

Soyoil futures were under pressure from weaker crude oil futures and the unwinding of soyoil/soymeal spreads, sources said. Some fund selling also weighed on prices during the session, they noted.

 

Soymeal futures felt underlying support from cash demand and a fair cash price, Zuzolo added.

 

"The meal has been very strong these past couple days from a screen perspective," he said.

 

Analysts predicted U.S. weekly soymeal export sales for the week ended Dec. 28 would be 50,000 to 100,000 tonnes. Sales for the week earlier were 108,700 tonnes.

 

Soyoil sales were predicted to be zero to 10,000 tonnes. Sales for the previous week were 61,000 tonnes.

 

In soyoil trades, JP Morgan bought 500 March and sold 600 March. RJ O'Brien and Rosenthal each bought 400 March. Funds sold an estimated 1,000 contracts.

 

In soymeal trades, Fortis bought 500 March, while JP Morgan sold 400 March. Funds sold an estimated 1,500 contracts.