April 27, 2007

 

CBOT Soy Review on Thursday: Lower; consolidates on exhausted speculative buying

 

 

Chicago Board of Trade soybean futures ended lower Thursday, consolidating Wednesday's gains amid the absence of a bullish spark to attract speculative buyers, analysts said.

 

July soybeans settled 2 3/4 cents lower at US$7.35, and November soybeans finished 2 1/4 cents lower at US$7.62 1/4. July soymeal settled US$1.70 higher at US$200.00 per short tonne. July soyoil ended 51 points lower at 32.75 cents a pound.

 

The market back filled some of Wednesday's price rally on profit-taking, with prices easing back within the market's recent trading range, analysts said.

 

Wednesday's rally was technically motivated and outside of the context of fundamentals, left futures to backpedal in the absence of spillover support from neighboring grain futures, traders said.

 

Underlying support was generated from higher-than- expected crush and export sales data as well as improved planting prospects for corn next week, traders added. However, following on the heels of Wednesday's double-digit gains, futures were unable to mount much of an upside charge, easily succumbing to spec profit-taking, a CBOT floor analyst said.

 

The DTN Meteorlogix weather forecast calls for rainfall of up to one inch from Illinois east to Ohio. Lighter showers will develop in the Ohio Valley. Fieldwork already was shut down Wednesday, and the delay will last through the end of the week. Western Midwest corn planting was already delayed by moderate to heavy rainfall earlier this week.

 

Weather conditions during the coming weekend will be favorable for drying out soils following this week's rainfall. No major weather systems are expected for the Midwest before late next week. This means a stretch of almost five days of dry weather. Some corn planting is likely to resume by the middle of next week as a result, Meteorlogix reports.

 

The U.S. Department of Agriculture reported weekly soybean export sales were 434,100 metric tonnes for the week ended April 19. Included in the total were sales of 11,600 metric tonnes for the 2007-08 marketing year. Analysts had forecast sales between 150,000 and 350,000 metric tonnes.

 

The Census Bureau reported soybean crushings in March totaled 155.9 million bushels. The figure was above the average survey estimate of 154.9 million bushels, up from February's 136.8 million and above last year's 149.5 million.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses. Speculative funds were estimated sellers of 1,000 lots on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil backpedaling on consolidative selling.

 

Soyoil futures finished the day firmly planted in negative territory, as profit-taking pressure sealed the market's fate, analysts said.

 

Abundant soyoil stocks and spillover weakness from crude oil supplied pressure to aid the defensive theme, analysts added.

 

Soymeal futures ended higher, benefiting from the unwinding of soyoil/soymeal spreads, analysts said. Higher-than-expected weekly export sales and talk of a decent domestic usage pace helped soymeal gain some product share on the day, analysts added.

 

July oil share ended at 45.02% and the July crush ended at 65 1/4 cents.

 

In soyoil trades, Bunge Chicago bought 500 July, JP Morgan, Citigroup, Fimat, and Prudential Financial each bought 300 July. Sellers were scattered among various commission houses. Commercial buying was estimated at 1,500 lots with speculative funds light net sellers on the day.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,500 lots.