February 3, 2006

 

CBOT Soy Review on Thursday: Ends up; rebounds from wednesday's slide

 

 

Chicago Board of Trade soybean futures ended moderately higher Thursday, bouncing back from Wednesday's declines on technical buying and spillover strength from neighboring wheat futures.

 

March soybeans finished 4 1/2 cents higher at US$5.84, March soymeal settled US$0.70 higher at US$181.90 a short tonne, while March soyoil ended 13 points higher at 21.95 cent a pound.

 

The consolidation of Wednesday's oversold conditions, borrowed momentum from wheat futures and extended forecasts predicting a return to hot and dry conditions in 10-14 day outlooks for Argentina, underpinned prices said John Kleist of Kleist Ag Consulting.

 

Otherwise, the market failed to find fresh fundamental influences, with many traders taking a wait and see approach to the market, in anticipation of weekend precipitation in Argentina as well as the potential for index fund buying.

 

Technical buying aided the firm tonnee, with bullish traders encouraged by the March contract's inability to find enough downside momentum to fill a gap on technical charts down to US$5.73 1/2.

 

Nevertheless, bearish fundamentals remain limiting factors to upside movement, with recent rains replenishing Argentine soil moisture and weekend showers expected to be widespread and significant, added Kleist.

 

The DTN Meteorlogix forecast said Argentine growing areas are in line to have more rain Friday into Saturday. These showers are expected to produce rainfall of up to one-and-one-half inch. During the first part of next week, temperatures will become very warm, with highs reaching into the 90s Fahrenheit, but this week's rainfall will hold off heat-stress damage to the soybean crop, Meteorlogix added.

 

In pit trades, ADM Investor Services, Term Commodities, O'Connor and Refco were featured buyers. ADM, Calyon Financial, Citigroup and RJ O'Brien were key sellers. Commodity funds were net buyers on the day. South American soybean futures ended lower. The March futures finished 5 cents lower at US$6.05.

 

 

SOY PRODUCTS

 

Soymeal futures ended modestly higher, consolidating prior declines in unison with soybeans. Solid weekly export sales provide mild support to aide the advances as well.

 

Soyoil futures climbed in step with soybeans, benefiting from technical buying after early declines failed to satisfy near term downside objectives. Supportive weekly export sales provide mild strength, but were offset by a revised census stocks figure showing increased soyoil inventories.

 

March oil share ended at 37.63%, and the March crush was at 57 3/4 cents.

 

The U.S. Department of Agriculture's soymeal weekly export sales totaled 198,200 tonnes, 5% above the week earlier and 71% higher than the prior four-week average. Trader's estimates ranged from 75,000 to 150,000 tonnes. Soyoil sales of 20,800 tonnes were above estimates that ranged from zero to 10,000 tonnes.

 

In soymeal trades, Fimat was the principle buyer, with Man Financial and UBS Securities featured sellers.

 

In soyoil trades, Citigroup, Fimat, and Man Financial were key buyers, with JP Morgan, Man Financial and Bunge Chicago key sellers. Commodity fund buying was estimated near 2,000 lots.