January 27, 2007

 

CBOT Soy Review on Friday: Ends down on lack of news, corn weakness

 

 

Chicago Board of Trade soybean futures finished lower Friday with a lack of fresh inputs to steer prices and under carryover pressure from the neighboring corn market, source said.

 

March soybeans finished down 2 3/4 cents at US$7.10 1/2 per bushel, and May soybeans closed 2 1/4 cents lower at US$7.26 1/4. March soymeal closed US$2.40 lower at US$205.80 per short tonne, and March soyoil finished up 8 points at 29.00 cents per pound.

 

The March and May soybeans contracts ended at their lowest closes since Jan. 16.

 

Trading was thin and choppy for most of the day session amid a quiet news front and position-squaring before the weekend, sources said. In pit trades, JP Morgan bought and sold 300 March. Term Commodities sold 500 March, and UBS sold 300 March.

 

Soybean futures showed some signs of modest strength late in the session as CBOT corn moved slightly higher, the trader noted. Corn, however, could not hold the gains and retreated lower, dragging soybeans along, he said.

 

Soybeans have been looking to corn for direction recently as the two markets compete for 2007 acreage, traders said.

 

Favorable weather conditions for the South American soybean crop remained a bearish influence with no other news for traders to focus on, an analyst added.

 

"It looks like they¡¯ve got a healthy harvest in front of them," Joe Victor of Allendale said about South America.

 

Argentina¡¯s central crop belt had rainfall of up to one-half inch precipitation Thursday, the DTN Meteorlogix weather firm said. Additional showers of as much as three-quarters of an inch are in store for the weekend, the firm reported.

 

"Argentina¡¯s got a good crop coming on the way," Victor said.

 

Argentina¡¯s year-on-year soybean exports rose 212% in November due to a surge in sales to China, the latest Agriculture Secretariat data show. Argentina exported 452,563 metric tonnes of soybeans in November, up from 145,035 tonnes a year ago, according to the data.

 

China is seeking to boost domestic processing of soybeans and has launched a major expansion of capacity to produce soyoil and meal from domestic and imported beans, according to analysts.

 

Farther north, Brazil has light showers in Mato Grosso, and rains of up to one and one-half inch in Parana and Rio Grande do Sul on tap during the next five days, Meteorlogix reported. The Brazil weather pattern remains favorable for crops going into the end of January, the firm noted.

 

A Brazilian farmers¡¯ cooperative in the center-south state of Goias, Comigo, is studying the possibility of building a 100 million liter-per-year biodiesel plant in the state, with soy as a principal feedstock, according to a report Friday in local Valor Economico newspaper.

 

In other news, the Commodity Futures Trading Commission is slated Friday afternoon to release the weekly commitment of traders report for the period ending Jan. 23.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended mixed.

 

Soyoil finished firmer on carryover strength from higher crude oil futures and light fund buying, while soymeal followed soybeans into negative territory, sources said. Funds bought an estimated 1,000 soyoil contracts and sold an estimated 700 soymeal contracts.

 

In soymeal pit trades, JP Morgan bought 500 March, and Term Commodities sold 400 May. Rand Financial each sold 400 March, while Tenco sold 300 March. In soyoil pit trades, Tenco and Rand Financial each bought 400 March. JP Morgan sold 400 March.

 

In other news, Argentina¡¯s soybean oil exports rose 25.3% in November compared with the same month a year ago, according to the Agriculture Secretariat¡¯s latest data. Argentina also exported 2,131,790 tonnes of soymeal and pellets in November, up 14.1% from 1,868,185 tonnes during the same month a year ago. The Secretariat doesn¡¯t distinguish between meal and pellets in its monthly report.