April 14, 2006

 

CBOT Soy Review on Thursday: Up; consolidates in quiet trade

 

 

Chicago Board of Trade soybean futures ended higher Thursday, sustaining their price strength throughout the day in quiet trade, as the market consolidated positions heading into an extended holiday weekend.

 

May soybeans finished 2 1/2 cents higher at US$5.63, July soybeans ended 3 cents higher at US$5.77 3/4, May soymeal settled US$1.50 higher at US$173.40 a short tonne, and May soyoil ended 8 points lower at 22.56 cents a pound.

 

A quiet news front, with weekly export sales falling in line with expectations, provided little direction for prices, with traders unwilling to take on added risk ahead of an extended holiday break, said a CBOT commission house broker.

 

Mild support continued to be derived from shrinking Brazilian production forecasts and ideas favorable corn planting conditions may lead to additional corn acres at the expense of soybeans.

 

Nevertheless, flat price volume was thin with nearby contracts trading inside days on technical charts. Traders said the market hovered in a narrow range for most of the day, after establishing the day's trading range in the first 10-minutes of the session.

 

The DTN Meteorlogix weather forecast said during the next three to five days, a dry weather pattern will enable a good amount of field work progress in all but the far-northern Midwest. The best chance for rainfall will be in the Northern Plains and northern Midwest. Much of the southern Midwest, Ohio Valley and Delta will have little rainfall.

 

In southern Brazil, thunderstorms will develop from south to north on Friday through Sunday. Rainfall will total up to one inch, with locally heavier amounts. Harvest delays will develop, although activity may be curtailed due to the holiday weekend. Argentina has scattered showers in store for Friday, but widespread rainfall is unlikely. Temperatures in Argentina's corn and soybean belt will also turn much cooler, Meteorlogix said.

 

Meanwhile, ahead of the open USDA reported net weekly U.S. old-crop soybean export sales of 344,200 metric tonnes, and 2006-07 marketing year sales of 1,760,600 tonnes. Analysts anticipated old-crop sales in a range of 200,000 to 350,000 metric tonnes. New-crop sales in the same period were expected in a range of 1,750,000 to 1,800,000 tonnes.

 

CBOT Markets will be closed Friday in observance of the Good Friday holiday.

 

On tap for Monday, the National Oilseed Processors Association is expected to report that its members' March soybean crush totaled 140.6 million bushels, up from the February's crush figure of 129.994 million, analysts say. NOPA members' soyoil stocks in March are expected to rise to 2.403 billion pounds from the 2.316 billion pounds reported for February.

 

In pit trades, JP Morgan and Citigroup each bought 800 May, with Fimat, ADM Investor Services, Man Financial and UBS Securities light sellers on the day. Commodity funds were net buyers on the day.

 

In spreads, Iowa Grain spread 2,000 July/May, Fimat spread 2,500 July/May, and O'Connor spread 3,000 May/July. South American soybean futures ended higher, in tune U.S. soybean futures. The May future finished 1 cent higher at US$5.89.

 

 

SOY PRODUCTS

 

Soymeal futures ended higher, climbing to session highs on the close, benefiting from late soyoil/soymeal spread unwinding. It was a consolidative day, with short covering from speculative shorts ahead of an extended weekend helping underpin prices throughout.

 

Soyoil futures ended lower, stumbling into negative territory down the stretch on late consolidation of oil/meal spreads. Futures held firm until the last 10 minutes of the session, with many traders content to sit on the sidelines ahead of a long holiday weekend.

 

May oil share ended lower at 39.41%, and the May crush was at 66 3/4 cents. In soymeal trades, RJ O'Brien Bought 400 May, Prudential Financial and Rand Financial each bought 200 May. Fimat sold 300 May and JP Morgan sold 200 July. Commodity funds were net buyers on the day.

 

In soyoil trades, buyers were scattered among various commission houses, with JP Morgan and UBS Securities each buying 300 July, and Tenco buying 200 December. RJ O'Brien sold 400 July, Tenco sold 200 July and Refco sold 200 May. Commodity funds were net buyers on the day.