January 18, 2008

 

CBOT Soy Review on Thursday: End lower in volatile consolidative trade

 

 

Chicago Board of Trade soybean futures ended lower Thursday, finishing a wide-ranging volatile session on the defensive from consolidative profit taking, analysts said.

 

March soybeans ended 6 cents lower at US$12.71, July soybeans finished 8 3/4 cents lower at US$13.05 1/2 and November soybeans ended 4 cents lower at US$12.70. March soymeal settled US$2.60 lower at US$344.30 per short tonne. March soyoil finished 18 points higher at 52.91 cents per pound.

 

The market showed the classic signs of a consolidating market, with expanded daily trading ranges seen in recent sessions indicative of a market putting in a near term top, said John Kleist of Kleist Ag Consulting.

 

Spillover strength from a run to limit levels in wheat, higher-than-expected export sales and bullish underlying fundamental outlooks combined to promote a higher theme in early action, analysts said.

 

However, the exhaustion of buying at the highs, coupled with a technically overbought market, exposed air pockets beneath prices, enabling futures to easily retreat on profit taking, analysts added.

 

"It's tough to keep buyers enthused with prices in uncharted territory, and once the export sales data was digested traders began to book some profits," Kleist said.

 

The market has experienced some of its widest daily trading ranges since August, and with futures vastly overbought technically, wide-swinging volatile markets will be seen as the norm in the near term, Kleist said.

 

The most active March contract traded in a 49 1/2-cent trading range, with new crop November futures trading in a 38 1/2-cent range.

 

Meanwhile, the DTN Meteorlogix weather forecast sees a chance for a few thundershowers in Argentina's Cordoba and Sante Fe provinces Thursday night into Friday, but this chance looks smaller than it did Wednesday at this time.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 965,300 metric tonnes for the week ended Jan. 10. Analysts had forecast sales between 300,000 and 600,000 metric tonnes.

 

In pit trades, Tenco bought 300 March, 500 November, and sold 1,000 March. Speculative fund selling was estimated at 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal backpedaling in unison with a late drop in soybeans. The market adopted a consolidative theme similar to soybeans, with the exhaustion of buying opening the door for profit taking, analysts said.

 

Soyoil futures ended higher, managing to shake off the bearish influence of setbacks in soybeans and soymeal. Supportive weekly export sales, bullish longer range fundamental outlooks, technical strength and meal/oil spread repositioning served as drivers to support prices, analysts said.

 

March oil share ended at 43.18% and the March crush ended at 66 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with Tenco a seller of 1,000 December. Speculative fund selling was estimated at 2,000 lots.

 

In soyoil trades, ADM Investor Services bought 300 March and 300 December, JP Morgan bought 400 March, and UBS securities bought 1,500 July. JP Morgan, and Newedge USA LLC each sold 300 March, and Fortis sold 300 July. Speculative fund buying was estimated at 2,000 lots.