May 11, 2006
CBOT Soy Review on Wednesday: Up on speculativebuys; trims gains late
Chicago Board of Trade soybean futures ended Wednesday's session posting modest gains but off earlier highs, with speculative and technical buying underpinning prices.
July soybeans ended 1 1/2 cent higher at US$6.06, July soymeal settled US$0.70 lower at US$178.80 a short tonne, while July soyoil ended 20 points higher at 25.28 cent a pound.
Light fund buying and position squaring ahead of Friday's USDA supply and demand report aided the firm tonnee, with U.S. dollar weakness, gains in gold futures and forecasts for U.S. Midwest rains this week spurring ideas of U.S. planting delays keeping prices in positive territory, analysts said.
The theme was consistent from the outset, with follow-through buying from stronger trade overnight kick-starting the gains. However, technical resistance at the US$6.12-US$6.14 level in July capped upside movement, with talk of hedge-related selling from South America and outlooks for the U.S. Department of Agriculture to project burdensome old- and new-crop ending-stock projections Friday applying light pressure to trim advances down the stretch, traders added.
Meanwhile, the DTN Meteorlogix weather outlook said that in the western Midwest (west of the Mississippi River), temperatures during this coming weekend will be as low as the low to mid 30s Fahrenheit in eastern South Dakota and southern Minnesota, and in the upper 30s Fahrenheit in northern Iowa and northeastern Nebraska.
In the eastern Midwest (east of the Mississippi), both widespread rain and cold temperatures will halt field-work progress, along with creating stressful conditions for early-developing row crops. Rainfall of up to two inches is in store Wednesday through Thursday across most of the region, Meteorlogix said.
On tap for Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report for the week ended May 4. 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 40,000 to 125,000 tonnes. Soyoil sales are pegged to fall within a range of zero to 10,000 tonnes.
On Friday, USDA will release its latest supply and demand reports. The average of analysts' estimates projects 2005-06 ending stocks at 568 million bushels. The estimates ranged from 555 million to 585 million bushels. In April, USDA projected the 2005-06 carryout at 565 million bushels. The average of analysts' estimates projects 2006-07 ending stocks at 678 million bushels. The estimates ranged from 621 million to 729 million bushels.
In pit trades, ADM Investor Services bought 1,000 July, Man Financial bought 1,200 November, ABN Amro and Goldenberg Hehmeyer each bought 500 July, and FCStonnee bought 1,000 2007 November.
On the sell side, UBS Securities sold 1,500 July, USA Trading sold 1,000 July, Term Commodities sold 400 July, and ABN Amro, Calyon Financial, O'Connor and Refco each sold 300 July. Commodity funds were net buyers on the day. South American soybean futures ended higher. The July future settled 1 cent higher at US$6.31.
SOY PRODUCTS
Soymeal futures settled lower, retreating from earlier gains. The inability of the market to find follow-through buying near recent highs coupled with a bounce in soyoil futures triggered inter-product spreading to press futures lower, traders said.
Soyoil futures ended higher, rallying back from earlier declines on speculative and technical buying. Trade positioning, coupled with optimistic outlooks for biodiesel use, remain supportive features to keep prices underpinned, trader add.
July oil share ended at 41.42%, and the July crush was at 65 1/2 cents.
In soymeal trades, FCStonnee bought 300 December, Man Financial bought 300 July, Fimat sold 400 July, and RJ O'Brien sold 500 July.
In soyoil trades, ADM Investor Services bought 400 July, Bunge Chicago bought 600 July, and JP Morgan bought 500 July. Term Commodities sold 1,100 July. Commodity funds were net buyers on the day.
