January 26, 2006

 

CBOT Soy Review on Wednesday: Lower on late spec, local sales

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, stumbling down the stretch on speculative and local selling, with a late pullback in corn and wheat gains aiding the late retreat.

 

March soybeans finished 4 1/2 cents lower at US$5.67, March soymeal settled US$1.50 lower at US$178.40 a short tonne, and March soyoil ended unchanged at 21.52 cent a pound.

 

The absence of supportive features in the market coupled with diminished spillover support in corn and wheat heading toward the close attracted selling pressure to send buyers running for cover, said a CBOT commission house broker.

 

The market held firm for most of the day, bolstered by borrowed momentum from speculative-led gains in the neighboring corn and wheat markets.

 

"It was the me-too effect" with beans for most of the day, keeping pace with the supportive tonnee in grain futures, said Dan Basse, president of AgResource in Chicago. However, bullish traders have little to hang their hats on, with expected heat and dryness in Argentina only expected to provide limited support, after recent showers had replenished soil moisture, he added.

 

The supportive tonnee was aided by technical strength, with advances accelerating once the most-active March future breached resistance at a chart gap at US$5.78. Nevertheless, a lack of follow-through buying at the highs trimmed the advances soon after.

 

Prices were confined within a narrow range through midday, before selling pressure surfaced, as the trimming of corn and wheat gains provided little incentive for market bulls to hold firm in the face of bearish fundamentals, traders added.

 

Meanwhile, the DTN Meteorlogix forecast said South American weather features a round of hot and dry conditions for Argentina's soybean belt between Thursday and Monday. During this period, temperatures will range from the mid-90s to around 100 Fahrenheit. This hot spell appears to be short-lived, however, due to showers and thunderstorms in the outlook for the middle to the end of next week.

 

In general, the Brazilian weather pattern continues to be favorable for the country's total soybean crop, Meteorlogix added.

 

On tap for Thursday, the U.S. Census Bureau is scheduled to release its monthly soybean crush report for December. The average of analyst's estimates surveyed by Dow Jones Newswires projects the crush at 149.0 million bushels from a range of 148.7 to 149.5. Soyoil stocks are pegged at 2.053 billion pounds and soymeal stocks are projected at 301.7 thousand tonnes.

 

The U.S. Department of Agriculture is scheduled to release its weekly export sales report at 7:30 a.m. CST (1330 GMT). Analysts surveyed by Dow Jones Newswires anticipate weekly U.S. soybean exports between 700,000 and 1.0 million metric tonnes for the week ended Jan 19.

 

In pit trades, Term Commodities, ABN Amro, JP Morgan, RJ O'Brien, Rand Financial and Refco were key buyers. On the sell side, Citigroup, Goldenberg Hehmeyer, Rand Financial and Refco were featured sellers.

 

South American soybean futures ended lower. The March futures finished 4 cents lower at US$5.99.

 

 

SOY PRODUCTS

 

Soymeal futures drifted lower in step with the late retreat in soybeans. The market lacked the supportive inputs to sustain earlier gains, traders said.

 

Soyoil futures ended near unchanged, paring earlier gains, on a late sell-off in the complex. The market benefited from spillover support from other markets for most of the day, with technical buying propelling prices as well. However, as was the case in other soy complex futures, the lack of fresh support failed to support the gains, pulling prices back to steady levels down the stretch.

 

March oil share ended at 37.62%, and the March crush was at 62 1/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various firms. In soyoil trades, buyers and selling was scattered among various firms with JP Morgan, Fimat, and Goldenberg Hehmeyer key buyers.