January 9, 2007

 

CBOT Soy Review on Monday: Down; pressured by lack of supportive inputs

 

 

Chicago Board of Trade soybean futures ended lower Monday, grinding out losses on speculative selling in the absence of fresh supportive inputs, analysts said.

 

January soybeans finished 3 cents lower at US$6.65, and March soybeans ended 4 1/4 cents lower at US$6.77 1/4. March soymeal settled US$0.80 lower at US$195.10 per short tonne, while March soyoil ended 31 points lower at 28.49 cents a pound.

 

The market took on a defensive posture, with spillover weakness from neighboring grains, a setback in crude oil, lackluster weekly export inspections and bearish crop conditions in South America holding buyers at bay, analysts said.

 

A quiet news front failed to provide direction to prices, with light speculative liquidation and technical pressures attracting sellers, a CBOT floor analyst said.

 

The ability of March futures to settle below meaningful resistance at its 50-day moving average casts a bearish cloud over the market, with outlooks for higher production and carryout forecasts on Friday and uncertainty surrounding how the Commodity Futures Trading Commission will list index fund positions in its Commitments of Traders Report due Monday afternoon attracted light liquidation selling, said Chad Henderson, analyst with Prime Agricultural Consultants in Brookfield, Wisc.

 

The DTN Meteorlogix Weather Service forecast said Brazil continues to have a favorable blend of warm temperatures and periodic rainfall. Argentina is showing some possible crop stress, however, because of recent light rains and the promise of very warm weather during the end of this week. The past weekend brought rains of more than two inches to western Cordoba, but very little moisture to Buenos Aires and Santa Fe provinces.

 

A few thundershowers will produce up to three-quarters of an inch rain in northern Argentina, but very little in the central areas this week. Temperatures in the central crop areas will range into the mid-90s Fahrenheit Monday before some cooler weather moves in for midweek. A longer-range outlook indicates mostly dry weather from Saturday through next Wednesday. Some light stress may occur with this drier and warmer trend, Meteorlogix reports.

 

U.S. Department of Agriculture reported 12.037 million bushels of soybeans were inspected for export in the week ended Jan. 4. The export figure is down 42.5% from the previous week's 20.944 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 20 million to 33 million bushels. Nevertheless, accumulated soy inspections total 504.919 million bushels, up 21.1% from the 417.089 million bushels reported at the same time last

 

In pit trades, Man Financial bought 300 March, Fimat and JP Morgan each bought 200 March. Sellers were scattered across various commission houses, with ADM Investor Services selling 300 March and RJ O'Brien a seller of 500 March. Speculative funds were estimated net sellers of 1,000 lots.

 

Day session volume on the e-CBOT platform totaled 24,965 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board. Soyoil futures emerged as the downside leader of the products, carving out new three-week lows. The market was pressured by speculative selling amid the willingness of fund managers to trim length, with sharply lower Malaysian palm oil futures and a setback in crude oil futures attracting sellers, analysts said.

 

Soymeal futures ended the session with modest declines, easing lower in step with the rest of the complex. However, the ability of the market to find technical support at major moving averages and the unwinding of oil/meal spreads provided strength to limit declines, traders said.

 

January oil share ended at 42.64% and the March crush ended at 66 1/4 cents.

 

In soymeal trades, Shatkin/Arbor bought 1,000 March, Bunge Chicago bought 30 March, and Iowa Grain and Man Financial bought 200 March. Tenco sold 700 March, Rand Financial sold 300 July, and JP Morgan sold 300 March and 200 May.

 

In soyoil trades, Fimat and JP Morgan each bought 600 March, and Citigroup bought 300 March. Fimat sold 400 March and 500 July, JP Morgan sold 300 March and Man Financial sold 200 March. Speculative funds were estimated sellers of 1,500 lots.