May 2, 2006

 

CBOT Soy Review on Monday: Up 0n tech buys, outside-market strength

 

 

Chicago Board of Trade soybean futures ended firm Monday, continuing their uptrend on speculative led technical buying and borrowed strength from outside inflationary markets.

 

July soybeans ended 5 3/4 cents higher at $6.06 3/4, July soymeal settled $5.30 higher at $179.00 a short tonne, while July soyoil ended 18 points higher at 25.90 cent a pound.

 

The market continued to try and follow the lead of rising metal and energy markets, with technically based buying a featured attraction in the absence of fresh fundamental news, said Dan Basse, president of AgResource Co. in Chicago.

 

The supportive tone was consistent from the outset, with speculative shorts reaching back to cover positions, with the ability of the July futures to pierce through overhead technical resistance uncovering speculative buying to firmly underpin prices, traders say.

 

However, the inability of active contracts to challenge resistance at Friday's highs served as a drag on upside momentum, limiting advances and uncovering profit-taking pressure down the stretch, said a CBOT commission house broker.

 

Meanwhile, bearish fundamentals were seemingly pushed to the side, as technical momentum has allowed futures to divorce themselves from their underlying fundamentals. Otherwise, the market had little new guidance with European and Asian markets closed for holidays, traders added.

 

The DTN Meteorlogix weather outlook said a continued showery pattern is in store for the Midwest this week, with rainfall of up to one inch in eastern North Dakota through central Minnesota, and up to one and one-half inch in Indiana and Ohio through Monday. Another episode of moderate rain showers will move through the entire Midwest during the Wednesday through Friday time frame, with another dose of one-half-inch precipitation, with locally heavier amounts on tap, Meteorlogix added.

 

The U.S. Department of Agriculture reported Monday that U.S. soybeans inspected for export in the week ended April 27 totaled 9.077 million bushels. China was the destination for 3.129 million bushels of the total inspections. Pre-report estimates forecast the inspection figure would fall within a range from 8 million to 14 million. Accumulated soybean inspections total 751.313 million bushels, down 21.1% from the 952.164 million amassed at the same time last year.

 

Monday afternoon 3 p.m. CDT, USDA is scheduled to release its weekly crop progress report, with analysts anticipating the USDA will show soybean plantings in a range of 3% to 6% complete.

 

In pit trades, ADM Investor Services and Man Financial each bought 500 July, Citigroup bought 600 July and 500 November, JP Morgan and Rand Financial each bought 1,000 July, Refco bought 2,000 July and Prudential Financial bought 600 July.

 

On the sell side, Rand Financial sold 700 July, ABN Amro sold 500 July and RJ O'Brien sold 300 July. Commodity funds were estimated buyers of 6,000 contracts on the day. South American soybean futures ended lower. The July future finished 2 1/4 cents lower at $6.25 3/4.

 

 

SOY PRODUCTS

 

Most soy product futures ended higher Monday, with soymeal leading the charge as out-of-position shorts in soymeal and soyoil attracting fresh buying interest. Strength in outside inflationary markets added to the supportive tone.

 

Soymeal futures rallied to one-month highs, buoyed by speculative buying as the market played catch-up with the strong gains seen in the rest of the soy complex last week. Soyoil futures ended firm but lost product share to soymeal. Biodiesel enthusiasm amid historic highs in crude oil futures prices managed to attract speculative buying to underpin soyoil futures.

 

July oil share ended at 41.96%, and the July crush was at 71 3/4 cents.

 

In soymeal trades, Iowa Grain bought 2,000 July, O'Connor bought 1,000 July, Man Financial, RJ O'Brien and Refco each bought 500 July, and Calyon Financial bought 400 July. JP Morgan sold 800 July with Fimat and Prudential Financial each selling 200 July. Commodity funds were net buyers on the day.

 

In soyoil trades, Man Financial bought 1,000 July, ADM bought 400 July, Bunge Chicago bought 500 July, FCStone bought 400 December, JP Morgan and Rand Financial each bought 400 July. Rand Financial sold 600 July, Tenco sold 800 July, FCStone sold 300 December, Fimat and Stern each sold 300 July. Commodity funds were net buyers on the day.