February 25, 2006

 

CBOT Soy Review on Friday: Up; bounces from prior losses

 

 

Soybean futures on the Chicago Board of Trade ended moderately higher Friday, bolstered by speculative-led buying, as the market bounced back from previous losses.

 

May soybeans finished 5 1/2 cents higher at US$5.90 1/4, May soymeal settled US$0.60 higher at US$177.30 a short tonne, and May soyoil ended 23 points higher at 23.37 cent a pound. For the week, May soybeans were down 22 cents, May soymeal dropped US$9.90 and May soyoil dropped 34 points.

 

The market staged a light technical bounce from prior losses, as market participants squared a few positions heading into the weekend, analysts said.

 

The market maintained a supportive tonnee throughout the session, with decent weekly export sales and momentum from strong outside market influences encouraging speculative short covering.

 

Otherwise, futures were held within relative narrow trading ranges unable to generate strong momentum in the absence of fresh fundamental news, traders said.

 

The U.S. Department of Agriculture's weekly export sales were 503,600 metric tonnes, 5% below the previous week, but equaled the prior four-week average. Trade estimates ranged from 400,000 to 600,000 tonnes.

 

The DTN Meteorlogix forecast said southern Brazil will have periods of showers and thunderstorms in Parana province through Saturday, with lighter showers in Rio Grande do Sul. Next week will feature mostly dry weather until Wednesday, followed by potentially widespread rainfall into the end of next week. Southern Brazil is not in the drought danger that the region experienced during the previous two crop years, Meteorlogix said.

 

In Argentina, a new round of thundershowers moves into the southern sunflower belt Sunday night and north into corn and soybean areas Monday night and Tuesday. This turn toward showery weather will benefit the soybean crop in its latter stages of development, Meteorlogix added.

 

In pit trades, Calyon Financial bought 600 May, Fimat bought 400 March and 400 May, and Merrill Lynch bought 400 May. ADM Investor Services and Man Financial each sold 300 May, and Fimat sold 300 March. Commodity funds were net buyers on the day.

 

South American soybean futures ended higher across the board. The May future finished 5 cents higher at US$6.14 1/2.

 

CBOT crush spread options started trading Friday, with the December 60 call strike ending at 4 1/4 cents and the December 62 call strike settling at 3 1/4 cents.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, up with soybeans. The complex managed to stem the tide of recent declines, fueled by speculative short covering and pre-weekend positioning. Decent weekly export sales helped support the market, as did the outside influence of higher crude oil and metals markets, traders said.

 

May oil share ended at 39.72%, and the May crush was at 57 cents. In soymeal trades, JP Morgan bought 400 March and 300 May, Cargill sold 400 March and Refco sold 300 May. In soyoil trades, Term Commodities bought 200 May and 200 March, JP Morgan bought 500 May, Rand Financial sold 400 May and Tenco sold 300 May.