March 10, 2006

 

CBOT Soy Review on Thursday: Ends higher; recovers from prior losses

 

 

Soybean futures on the Chicago Board of Trade ended higher Thursday, but off their highs as the market quietly held price strength on a technical recovery from prior losses.

 

May soybeans finished 3 3/4 cents higher at US$5.87 3/4; May soymeal settled 50 cents higher at US$173.90 a short tonne; and May soyoil ended 15 points higher at 24.07 cent a pound.

 

The market managed to find stability after stumbling below major moving average support in recent sessions, analysts said.

 

A lack of follow-through selling pressure, borrowed strength from higher inflationary markets and larger-than-expected weekly export sales provided underlying support to keep buyers in control of price direction.

 

However, activity was relatively subdued throughout the session, with active futures settling into narrow trading ranges as the market consolidated positions heading into Friday's U.S. Department of Agriculture supply and demand reports.

 

Traders said the active May futures rallied to satisfy a near-term technical objective of filling a gap on technical charts early, but lacked follow through to extend the gains and left futures holding in a range for the remainder of the day. Bearish weather outlooks for the Midwest and Brazil as well as ample nearby supplies applied light pressure, traders added.

 

The DTN Meteorlogix forecast said scattered rain generally from a quarter inch to one inch in the western and northern Midwest will recharge soil that hasn't seen much precipitation this winter. That rain should slack off by Sunday.

 

Elsewhere, Brazil's soybean areas, where pods are filling, will see scattered showers Thursday into Friday, up to half an inch. Rain will continue for Mato Grosso and Mato Grosso do Sul into Saturday, but in Rio Grande do Sul and Parana, conditions will be dry by the weekend, Meteorlogix added.

 

Ahead of the open, the USDA said weekly soybean export sales for 2005-06 totaled 504,600 metric tonnes, which were 37% above the previous week and 5% over the prior four-week average. Trade estimates ranged from 250,000 to 450,000 tonnes. Sales for 2006-07 were 245,400 tonnes.

 

On tap Friday, the USDA is scheduled to release its supply and demand report at 7:30 a.m. CST (1330 GMT). The average of trade guesses from 14 analysts surveyed by Dow Jones Newswires pegs 2005-06 estimated ending stocks at 562 million bushels. The estimates ranged from 555 million bushels to 584 million bushels.

 

In pit trades, buyers and sellers were scattered among various firms, with commodity funds net buyers on the day. South American soybean futures ended higher. The May futures finished 4 cents higher at US$6.08.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board Thursday, in tune with the supportive tonnee in soybeans. Technical buying amid ideas recent setbacks were overdone attracted buyers to underpin prices in soymeal and soyoil futures. Solid weekly export sales provided extra incentive for buyers in soyoil.

 

May oil share ended at 40.90%, and the May crush was at 59 1/2 cents.

 

In soymeal trades, Fimat, Man Financial and Calyon Financial were featured buyers with Man Financial and RJ O'Brien key sellers.

 

In soyoil trades, JP Morgan, Citigroup, Fimat and Tenco were buyers, with selling reported from Bunge Chicago and Iowa Grain.