January 30, 2007

 

CBOT Soy Review on Monday: Finishes weaker on corn, lack of news

 

 

Amid a lack of fresh supportive news, Chicago Board of Trade soybean futures Monday closed lower for the fourth trading session in a row.

 

March soybeans finished 1 cent lower at US$7.09 1/2, while May soybeans ended down 1 1/2 cents at US$7.24 3/4. March soymeal ended up US$0.60 at US$206.40 per short tonne, and March soyoil closed 18 points lower at 28.82 cents per pound.

 

The losses brought the March soybeans contract to its lowest close since Jan. 16. Early in the day session, the contract traded at its lowest price level since Jan. 12.

 

Trading was choppy, floor sources noted.

 

Soybean futures opened lower on follow-through selling from the overnight and spillover pressure from the neighboring corn market, a broker noted. But prices firmed up shortly after the U.S. Department of Agriculture released weekly U.S. soybean export inspections that were above trade expectations, added Mike Zuzolo, analyst with Risk Management Commodities.

 

The USDA reported 37.549 million bushels were inspected for export in the week ended Jan. 25, exceeding analysts' estimates of 22 million to 30 million. For the week ended Jan. 18, inspections were 27.139 million, the USDA said.

 

"Most of the support, we think, probably came from the export inspections being above the estimates," Zuzolo said.

 

Shorts, however, likely got trapped by the export inspections rally, Zuzolo noted.

 

Soybeans retreated to negative territory after the gains under continued pressure from weakness in the corn market, analysts said.

 

Looking ahead, soybeans may bounce higher overnight after CBOT corn and wheat futures made moves off their lows late in the day session, Zuzolo said. Soybeans also may move higher if crude oil futures firm up, he added.

 

There also have been some supportive new concerns about weather in South America, analysts noted.

 

The DTN Meteorlogix weather firm reported Brazilian crop areas Mato Grosso and Mato Grosso do Sul are getting scattered thunderstorms with temperatures ranging around normal. The precipitation is good for the growth of crops, but Asian soybean rust is a threat under humid conditions, the firm said.

 

Central crop areas of Argentina got some scattered rainfall of up to 3/4 inch over the weekend, the weather firm noted.

 

The western and south-central areas, including Cordoba and La Pampa provinces, will see some isolated thundershowers Monday, but will be mostly dry Tuesday and Wednesday, Meteorlogix said. Temperatures are expected to be mostly above normal.

 

In other news, Philippine feed millers plan to buy soybean meal and soybeans of optional origin in a tender Feb. 1 for shipment in May, an industry official said Monday.

 

In CBOT pit trades, JP Morgan bought 600 March, while Calyon and Fortis each bought 500 March. UBS bought 400 March. On the other side, Term Commodities sold 500 March, and JP Morgan sold 400 March. Fortis sold 400 July.

 

Funds bought an estimated 1,000 contracts around midday, a source said.

 

The Commodity Futures Trading Commission reported in its supplemental commitment of traders report that index funds held net long positions totaling 134,047 combined CBOT soybean futures and options contracts as of Jan. 23. Index traders increased longs by 2,612 contracts and cut shorts by 201 contracts, according to the CFTC.

 

Traditional large speculative traders, meanwhile, were net long 66,233 soybean contracts, the CFTC said.

 

 

SOY PRODUCTS

 

Soy product futures finished mixed, with soymeal feeling some support from the unwinding of the soyoil/soymeal spread, sources said. Funds also bought an estimated 1,500 soymeal contracts, a source said.

 

In soymeal pit trades, Calyon and Fortis each bought 500 March. Fortis bought 300 March. JP Morgan sold 500 March.

 

Large speculative traders were net long combined soymeal futures and options positions by 30,731 lots, the CFTC reported. They lifted longs by 9,536 contracts and decreased shorts by 3,068, according to the CFTC.

 

Weaker crude oil futures weighed on soyoil throughout the day session, a trader noted. Funds sold an estimated 1,000 soyoil contracts.

 

In soyoil pit trades, ADM and Term Commodities each bought 400 March. Bunge sold 400 March, while JP Morgan sold 300 March.

 

Index funds were net long combined soyoil futures and options positions to the tune of 69,320 contracts, the CFTC said. They increased longs by 2,319 and decreased shorts by 298.

 

Speculative funds were reported net long 51,577 soyoil lots.