January 25, 2006

 

CBOT Soy Review on Tuesday: Down on fund sales, S American weather

 

 

Soybean futures on the Chicago Board of Trade weakened Tuesday after a choppy session on mostly favorable South American weather, a lack of bullish news and fund sales, sources said.

 

Most-active March soybeans lost 3 1/4 cents to US$5.71 1/4 and July beans fell 3 3/4 cents to US$5.91 1/2. March soymeal settled 60 cents lower to US$179.90 a short tonne and December soyoil was unchanged at 21.52 cents a pound.

 

An expected slowdown in world trade contributed to the weaker prices.

 

"Internally, the export business hasn't been stellar and the market has been cautious to rally because it doesn't want to shut off what demand we have. In addition, with the Lunar New Year coming up it's quite likely that we might see China be a bit more quiet on the import scene," said independent agricultural analyst John Kleist.

 

The Asian holiday begins Jan. 29.

 

In South America, light showers were expected Tuesday over Argentina's soy-growing regions. Dry conditions are expected to return Wednesday with another chance for showers on Sunday, DTN Meteorlogix said. Areas in Brazil also saw scattered showers and thunderstorms, and rainy conditions are expected to continue through the week.

 

"Argentina had some uneven weather, but there's really nothing critical as far as crop problems are concerned. In Brazil, they've been having just glorious weather," Kleist said.

 

In fact, state meteorologists in Rio Grande do Sul forecast normal rainfall and temperatures over the next three months, which "could improve the crop," said Kleist.

 

"It certainly could cement the estimates towards the higher end of expectations," he added.

 

In other news, The United Soybean Board and the North Central Soybean Research Program announced they will continue to provide funds for "sentinel" research plots of early planted U.S. soybeans designed to monitor the movement of Asian soybean rust.

 

The disease - which causes premature defoliation and severe yield losses - spread to nine southern states last growing season.

 

In export business, Taiwan bought 57,000 metric tonnes of U.S. soybeans Tuesday for February-March arrival.

 

At the CBOT, Refco sold 1,500 March and 200 May soybeans; Tenco sold a net 1,000 March; UBS sold 500 May; Fimat sold a net 200 March; and D.T. Trading sold 200 March.

 

Funds sold an estimated 1,800 soybean contracts.

 

Term Commodities bought 700 May; Calyon Financial bought 400 March and 200 May; Goldenberg-Hehmeyer bought 300 March; R.J. O'Brien bought a net 200 March; and Rand Financial and Rosenthal each bought 200 March.

 

 

SOY PRODUCTS

 

The product markets closed steady to weak in light trade, pressured by the weakness in soybeans.

 

Soymeal finished weaker in tandem with the soybean losses. March meal fell to a US$179.40 session low and settled just up from that level at US$179.90 a tonne. The contract topped out at a US$181.80 session high in early trade, a level that coincided with the 100-day moving average and which is expected to provide near-term resistance.

 

Prudential sold a net 400 March and 300 May; Refco sold 500 March and a net 200 May; and Bunge sold 400 March. ADM bought 300 March and Calyon bought 200 March.

 

Funds sold an estimated 1,400 meal contracts.

 

Soyoil finished unchanged after a choppy trading session.

 

March oil was bound by a 21.72 session high and a 21.30 low. The contract traded through the 21.57 10-day moving average before settling just beneath that level. Further resistance is met at the 21.77 and 21.90 moving averages.

 

R.J. O'Brien and O'Connor each sold 400 March oil; Calyon sold 300 March; and Fimat sold 200 July. ADM, Tenco and Bunge each bought 200 March, while Fimat and Rosenthal each bought 300 March.

 

Funds sold an estimated 600 oil contracts.