May 4, 2006

 

CBOT Soy Review on Wednesday: Higher; consolidates in two-sided trade

 

 

Chicago Board of Trade soybean futures ended Wednesday's session posting modest gains, as the market consolidated in choppy two-sided action amid the absence of fresh influences.

 

July soybeans ended 2 1/2 cents higher at US$6.05 1/2; July soymeal settled US$0.60 lower at US$176.90 a short tonne; and July soyoil ended 1 point lower at 25.72 cent a pound.

 

Futures struggled to find lasting direction over the course of the day, as early speculative support was exhausted after outside markets turned lower, analysts said.

 

Futures have seemingly settled into a comfort zone, unable to break out of the recent trading range. Bearish fundamentals limit upside movement while inflationary influences attract speculative support to keep a floor under prices, said a CBOT commission house broker.

 

However, bullish traders were optimistic about the market's performance. Some traders were impressed with soybeans' ability to end higher in the face of broadbased selling in other commodities. Precious metals, energies, corn and wheat futures ended lower on the day.

 

Meanwhile, the DTN Meteorlogix weather outlook said the eastern Midwest (east of the Mississippi River), will experience thunderstorms with up to one inch of rain, and some locally heavier precipitation, on Wednesday and Thursday, lingering in the Ohio Valley on Friday. The showers come very shortly after widespread rains last weekend, and may create a spongy surface in fields, not conducive for machinery operation.

 

The U.S. Department of Agriculture is scheduled Thursday to release its weekly export sales report for the week ended April 27. Analysts surveyed by Dow Jones Newswires anticipate soybean commitments in a range of 100,000 to 250,000 metric tonnes. Soymeal sales are expected in a range of 35,000 to 125,000 tonnes. Soyoil sales are pegged to fall within a range of zero to 10,000 tonnes.

 

In other news, the National Commodities Supply Corp., or Conab, lowered its official estimate for the Brazilian 2005-06 soy crop by 500,000 metric tonnes to 55.2 million metric tonnes Wednesday.

 

In pit trades, Man Financial and Merrill Lynch each bought 300 July, and ADM Investor Services, Bunge Chicago, Calyon Financial, Citigroup and O'Connor each bought 200 July.

 

On the sell side, O'Connor, Rand Financial and Rosenthal each bought 300 July, and RJ O'Brien and Refco each bought 200 July.

 

South American soybean futures finished higher. The July contract settled 8 3/4 cents lower at US$6.28 3/4.

 

 

SOY PRODUCTS

 

Soy product futures ended slightly lower on the day, backpedaling in consolidative fashion amid the absence of supportive feature to underpin prices. Soymeal futures ended lower across the board, losing product share as prices slid below meaningful support levels with commercial selling weighing on prices, traders say.

 

Soyoil futures ended mixed, pulling back from earlier gains, as weakness in energy markets tempered biodiesel enthusiasm from the speculative sector, traders said. Growing U.S. soyoil supplies limited upside movement, but futures continued to maintain a supportive spread relationship with soymeal, traders added.

 

July oil share ended at 42.09%, and the July crush was at 66 1/2 cents.

 

In soymeal trades, JP Morgan bought 500 July, and Bunge Chicago sold 1,000 July.

 

In soyoil trades, Citigroup bought 400 July and 600 December, and JP Morgan bought 800 July. Bunge Chicago sold 600 July, Rand Financial and UBS Securities each sold 500 July, and ADM Investor Services, Fimat and Tenco each sold 300 July.