January 5, 2008

 

CBOT Soy Review on Friday: Consolidates; pre-weekend profit-taking

 

 

Chicago Board of Trade soybean futures ended Friday's day session lower, consolidating after the week's run to new contract and all-time highs.

 

January soybeans settled 2 1/2 cents lower at US$12.49 and March soybeans ended 5 cents lower at US$12.62 1/2. March soymeal settled US$2.30 lower at US$348.30 per short tonne. March soyoil finished unchanged at 51.18 cents per pound.

 

Speculative profit taking was a featured attraction, with traders taking the opportunity to square up a few positions heading into the weekend after a bullish price rise produced fresh highs recently, analysts said.

 

The absence of a fresh supportive spark to entice traders into extending the record highs as well as the absence of fund buying that carried futures higher in previous sessions attracted profit taking pressure, analysts added.

 

Overall activity was relatively subdued, with a mild technical setback, the term used to describe the day's losses, as the fundamental outlook remains supportive and concerns over heat and dryness in Argentina still linger, a CBOT floor broker said.

 

Even with rains forecasted to move into Argentine growing areas by next week, until the moisture hits the ground, traders are unwilling to take a bearish stand in the face of a bullish trend, he said. In addition, traders anticipate supportive crop data in next week's U.S. Department of Agriculture crop reports, he added.

 

Nevertheless, lower-than-expected weekly export sales and weakness in outside inflationary markets served as a mild influence to encourage buyers to take a break heading into the weekend, analysts said.

 

The DTN Meteorlogix weather forecast said hot weather is in store for Argentina's central crop belt has through the middle of next week, with some high temperatures in Buenos Aires, Cordoba and Santa Fe provinces reaching 100 degrees Fahrenheit. Rainfall prospects in central Argentina continue to be very inconsistent. Forecast models have delayed rain next week by at least 24 hours. This opens the door to some fairly hot weather ahead of any rainfall. The rainfall potential appears to be at least moderate, but it is tough to call, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with consolidative position squaring a feature after a recent run to new contract highs. Soymeal futures eased lower on profit taking pressure, but managed to trim its losses down the stretch as aggressive selling pressure was exhausted after midday, analysts said.

 

Soyoil futures ended mixed, with early profit taking selling giving way to meal/oil spreading unwinding, analysts added.

 

March oil share ended at 42.35% and the March crush ended at 66 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 2,000 lots.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,000 lots.