May 5, 2007

 

CBOT Soy Review on Friday: Drifts lower in choppy, two-sided trade

 

 

Chicago Board of Trade soybean futures ended a two-sided session marginally lower Friday, carving out modest declines in choppy, consolidative trade.

 

July soybeans settled 1/4-cent lower at US$7.47 1/2, and November soybeans finished 1/2-cent lower at US$7.76 1/4. July soymeal settled US$1.90 higher at US$202.50 per short tonne. July soyoil ended 46 points lower at 33.17 cents a pound.

 

The absence of fresh fundamental directives promoted a sideways theme, with many traders unwilling to take on added risk ahead of the weekend, particularly with the variability of weather forecasts for the Midwest, analysts said.

 

The market is in a transition period, uncertain of how many potential corn acres will move to soybeans and whether Midwest weather will shift to allow soybean plantings to catch up to an average seeding pace, said Joe Victor, analyst with Allendale Inc. in McHenry, Ill.

 

Overall activity is relatively light, with traders taking a cautious approach heading into the weekend, with the uncertainty of next week's weather keeping the market in a holding pattern, a CBOT floor analyst said.

 

Choppy activity was featured, as the market struggled to find a clear path. Weekend position squaring added to the two-sided theme, with bearish supply side fundamentals keeping a lid on old-crop upside potential,

 

Meanwhile, the DTN Meteorlogix forecast continues with a high prospect of rainfall totaling more than one inch during this coming weekend in the western Midwest, with the widest coverage and greatest rainfall in the Dakotas, Minnesota, the western two-thirds of Iowa, eastern Nebraska, and northern Missouri. In the eastern Midwest, thundershowers with up to one-half inch of rain will halt field work in western through central Illinois. Some sectors of western Indiana may also take in this moisture. Elsewhere in the eastern Midwest, rainfall will be scattered and light; thus offering a better opportunity for field work to continue.

 

In pit trades, Fimat bought 800 August, Tenco and RJ O'Brien each bought 300 July. Speculative fund buying was estimated at 2,000 lots. JP Morgan sold 400 July, and Man Financial sold 300 July.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil stumbling lower on end-of-week profit taking. Soyoil futures backpedaled over the course of the day, with overnight declines in Malaysian palm oil and weakness in crude oil futures encouraging speculative traders to take some profits off the table, analysts said.

 

Soymeal futures ended higher, garnering strength from a correction in the soyoil/soymeal spread relationship, analysts said. Soymeal benefited from soyoil's demise, managing to garner products share on the unwinding of soyoil/soymeal spreads, traders added.

 

July oil share ended at 45.03% and the July crush ended at 62 3/4 cents.

 

In soyoil trades, buyers and sellers were widely scattered among various commission houses, with speculative funds estimated sellers of 2,000 lots.

 

In soymeal trades, Rand Financial bought 400 July, Bunge Chicago bought 200 July and sold 300 July, and Calyon Financial sold 300 July.