January 27, 2006

 

CBOT Soy Review on Thursday: Funds provide late pop in beans

 

 

Soybean futures on the Chicago Board of Trade rose Thursday on late technically linked buying and backgrounded by concerns over dry growing areas in Argentina, sources said.

 

Most-active March soybeans gained 6 cents to US$5.73 and July beans rose 6 1/4 cents to US$5.94 3/4. March soymeal gained US$1.90 to US$180.30 a short tonne and March soyoil lost 1 point to 21.51 cents a pound.

 

"Funds have been steady buyers in the grains all day, and they continued to buy into the close. I think the weather in South America is enough to encourage a little bit of short-covering," said Brian Hoops, president and senior market analyst at Midwest Market Solutions.

 

"We had a poor technical close yesterday (Wednesday) and no follow-through today, so it was kind of a signal for some shorts to get out of their short positions - that gave us a little buying strength as well," he added.

 

Fundamental news to start the day wasn't friendly to market bulls, however.

 

Soybean export sales for the week ended Jan. 19 were a net 521,900 metric tonnes, down 59% from the previous week and 32% below the prior four-week average, the U.S. Department of Agriculture reported. Traders had expected sales to range from 700,000 to 1 million tonnes.

 

Also, the U.S. Census Bureau said the December soybean crush was 148 million bushels, below expectations for 149 million. A rise in soyoil and soymeal stocks to a respective 2.189 billion pounds and 338,845 short tonnes didn't improve market sentiment any, traders said.

 

The bit of bullish news that some speculative traders decided to hang their hat on were forecasts for above-normal temperatures and dry conditions Thursday through Monday in Argentina. A chance for showers exists next Tuesday into Wednesday, but dry conditions are expected to return Thursday along with higher temperatures, DTN Meteorlogix said.

 

In Brazil, scattered showers and storms are possible in Mato Grosso and Mato Grosso do Sul Thursday through Saturday. Chances for scattered, daily rainfall exist from Sunday through Tuesday, the weather agency said.

 

At the CBOT, Calyon Financial bought 600 March, Eagle bought 500 March, Rand Financial bought 400 March, Prudential Financial and Stern each bought 200 March, Tenco bought 200 May and UBS bought 200 July.

 

Refco sold 500 March and 200 May, Kottke sold 500 July, FCStonnee and Man Financial each sold 200 July and Citigroup sold 200 March.

 

Funds bought an estimated 2,000 soybean contracts.

 

 

SOY PRODUCTS

 

The product markets closed steady to mixed, with meal lifted by the gains in soybeans and soyoil under slight pressure on meal/oil spreading, traders and analysts said.

 

Export sales for meal totaled 189,100 tonnes, up 20% from the previous week.

 

Funds bought an estimated 1,000 meal contracts.

 

Rand Financial bought 500 March and Tenco bought 200 March. Citigroup sold 200 March and 200 May, Fimat sold 200 March and Prudential Financial sold 200 July.

 

Soyoil finished slightly lower after fund selling pressured the market early. Late buying cut most of the losses, however.

 

Export sales for soyoil totaled 4,400 tonnes.

 

Funds sold an estimated 1,500 oil contracts.

 

Man Financial and Rand Financial each sold 800 March, Tenco sold 400 March. Fimat bought 600 March and Bunge bought 300 March, while Cargill and CIS each bought 200 March.