April 13, 2006

 

CBOT Soy Review on Wednesday: Down amid setback from Tuesday's gains

 

 

Chicago Board of Trade soybean futures ended Wednesday's session posting modest declines, setting back from Tuesday's advances amid a lack of supportive features.

 

May soybeans finished 2 cents lower at US$5.60 1/2, July soybeans ended 2 1/4 cents lower at US$5.74 3/4, May soymeal settled US$0.70 higher at US$171.90 a short tonne, while May soyoil ended 32 points lower at 22.64 cent a pound.

 

The bearish fundamentals of the market weighed on prices, with the absence of outside market support and spillover weakness from corn and wheat sent buyers running for cover, analysts said.

 

The exhaustion of early buying interest opened the door for the declines, with futures finding stability in negative territory. The theme was consistent for the remainder of the day, with prices settling into a range as shrinking Brazilian crop estimates managed to provide mild support to limit declines, traders said.

 

Otherwise, the market had little directive forces, with the rolling of spreads remaining a featured attraction in subdued flat price trading.

 

The DTN Meteorlogix weather forecast said soybean growers in southern Brazil have harvest delays ahead to finish out this week and into the weekend. Thunderstorms will develop in Rio Grande do Sul (far south) and spread north on Friday and Saturday. Rainfall of up to one inch, with locally heavier amounts, is in store. Showers will linger in Parana and Mato Grosso do Sul on Sunday. Temperatures will be warm through Thursday, and then will cool from south to north during the weekend. The onset of the thundershower pattern will inhibit soybean harvest, Meteorlogix said.

 

USDA is scheduled Thursday to release its weekly export sales report for the week ended April 6. Analysts surveyed by Dow Jones Newswires anticipate old-crop soybean commitments in a range of 200,000 to 350,000 metric tonnes. New-crop sales are estimated between 1,750,000 to 1,800,000 tonnes. Soymeal sales are expected in a range of 50,000 to 100,000 tonnes. Soyoil old-crop sales are pegged to fall within a range of zero to 10,000 tonnes, and new-crop sales are seen between 19,000 and 20,000 tonnes.

 

In pit trades, ABN Amro, Citigroup, Refco and USA Trading each bought 500 May, UBS Securities bought 700 May, Rand Financial bought 400 May and Shatkin/Arbor bought 700 May.

 

Sellers were scattered among various commission houses, with Man Financial, Merrill Lynch and RJ O'Brien key sellers. South American soybean futures ended lower. The May future finished 1 cent lower at US$5.88.

 

 

SOY PRODUCTS

 

Soymeal futures ended mixed, with nearby/deferred month spreading underpinning front-month contracts. The unwinding of soyoil/soymeal spreads helped meal gain at the expense of soyoil, as traders position themselves heading toward an extended holiday weekend.

 

Soyoil futures retraced Tuesday's gains, losing oilshare in the crush as the market staged a modest correction from recent advances. Technically inspired selling with active contracts stumbling below support levels aided the decline in prices, traders said. This was consistent, with traders having little incentive to push upside moves without outside market support.

 

May oil share ended lower at 39.71%, and the May crush was at 66 3/4 cents.

 

In soymeal trades, Goldenberg Hehmeyer and Rand Financial each bought 500 May, Bunge Chicago sold 800 July and RJ O'Brien sold 600 July. Commodity funds were net sellers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with commodity funds net sellers on the day.