April 24, 2007

 

CBOT Soy Review on Monday: Lower on speculative sales; lack fresh support

 

 

Chicago Board of Trade soybean futures ended lower Monday, succumbing to light speculative sales in the absence of fresh supportive inputs and spillover weakness from neighboring grain futures.

 

July soybeans settled 2 cents lower at US$7.38, and November soybeans finished 1 3/4 cent lower at US$7.65 3/4. July soymeal settled US$0.50 lower at US$201.60 per short tonne. July soyoil ended 18 points lower at 32.72 cents a pound.

 

The absence of fresh fundamental news is keeping the market following its recent trend, and with uptrend support broken, traders feel comfortable selling the market in the absence of fresh influences, analysts said.

 

"Without fundamental features, you don't fight the trend," a CBOT analyst said.

 

Spillover weakness from lower corn and wheat futures aided the lower theme, with lackluster weekly export inspections and bearish old-crop supplies keeping buyers content to sit on the sidelines until planting and weather issues take center stage in the market, a CBOT analyst added.

 

Nevertheless, new crop month futures price direction remains uncertain as traders continue to focus on corn planting progress for signs of potential soybean acreage totals in 2007, a trader said.

 

Meanwhile, a notable rain event is on tap for many areas of the central Plains and southern Midwest, with 1- to 3-inch rain totals expected to be common in many of these areas, Cropcast said in a midday forecast. The wettest days are expected to be through Wednesday in the Plains and from Tuesday through Thursday in the Midwest, Cropcast reports.

 

However, drier, warmer weather quickly returns to the nation's midsection after this system. The next significant opportunity for rainfall then appears to hold off until late in the 10-day period, and the current forecast appears to focus most of this rainfall on the western Midwest, Cropcast said. Other areas would largely remain dry until beyond the 10-day period. This should allow fields to dry nicely, and planting activities should progress quite well in most areas from this weekend into next week, Cropcast forecasts.

 

U.S. Department of Agriculture reported 8.513 million bushels of soybeans were inspected for export in the week ended April 19. The export figure was down 37.2% from the previous week's 13.556 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 12 million to 18 million bushels.

 

In pit trades, ADM Investor Services and Fimat each bought 300 May, FC Stonnee bought 600 July, and Rand Financial bought 300 July. Sellers were scattered among various commission houses, with speculative funds estimated sellers of 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, moving in unison with soybeans and Malaysian palm oil futures. Soyoil futures were down on consolidative sales from Friday's gains. Profit taking of soyoil/soymeal spreads applied pressure, while spillover support from crude oil futures provided support to limit downside potential, analysts said.

 

Soymeal futures were lower with the rest of the soycomplex, but managed to regain some product share at the expense of soyoil, traders said. Nevertheless, the market carved out a new swing low for the current price move, with active contracts falling to their lowest level since Jan. 11.

 

July oil share ended at 44.80% and the July crush ended at 65 1/2 cents.

 

In soyoil trades, ADM Investor Services and Term Commodities each bought 300 May, and Fimat bought 300 July. Fimat and Rand Financial each sold 500 July, with Iowa Grain and Man Financial each sellers of 300 July. Speculative fund selling was estimated at 3,000 lots.

 

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