May 13, 2006

 

CBOT Soy Review on Friday: Near unchanged after two-sided session

 

 

Soybean futures at the Chicago Board of Trade ended near unchanged Friday, following a two-sided session that saw early speculative buying succumb to commercial hedging and end-of-week profit-taking pressure.

 

July soybeans ended unchanged at US$6.13, July soymeal settled US$0.90 lower at US$177.80 a short tonne, and July soyoil ended 13 points lower at 26.19 cent a pound.

 

The market was along for the ride with corn and wheat on its initial bounce to 2 1/2-month highs, before hedge-related pressure and an absence of inflationary market support attracted sellers to send prices backpedaling to lower levels, analysts said.

 

The exhaustion of buying at session highs opened the door for futures to divorce themselves from the strength of the neighboring grain futures, with record-breaking projected ending stocks from the U.S. Department of Agriculture's supply and demand report limiting upside momentum as well, traders add.

 

Talk of a decline in Brazilian cash soybean prices amid a pick-up in farmer sales in southern Brazil helped take the edge off prices as well, with traders content to take profits on the week in the absence of aggressive speculative buying that buoyed prices on inflationary concerns in previous sessions.

 

Meanwhile, the DTN Meteorlogix weather outlook said chilly temperatures will continue through the weekend in the Midwest. Episodes of light rain or drizzle will continue in northern and eastern areas, mostly along and east of the Mississippi River. Temperatures will drop to freezing in Wisconsin, northern Illinois and Michigan. West of the Mississippi, widespread frost and light freeze conditions are likely in the Dakotas and Minnesota, with frost possible as far south as central Iowa.

 

Below-normal to much-below-normal temperatures will continue in the Midwest during next week. These cool temperatures will combine with wet soils in the northern and eastern Midwest to slow down planting progress. Also, early growth of corn and soybeans will be hindered by the chilly temperatures, Meteorlogix said.

 

In pit trades, ADM Investor Services bought 1,000 July, ABN Amro, Fimat, Goldenberg Hehmeyer, Man Financial and RJ O'Brien each bought 500 July, Bunge Chicago and FCStonnee each bought 400 November.

 

On the sell side, Term Commodities sold 1,500 July, Calyon Financial, Fimat and JP Morgan each sold 1,000 July, Man Financial sold 1,200 July, and Bunge Chicago and Refco each sold 500 July. South American soybean futures ended steady, with the July future settling unchanged at US$6.33.

 

 

SOY PRODUCTS

 

Soy product futures stumbled lower after early market strength subsided. Soyoil futures finished on the defensive, reversing course after initial speculative buying propelled the active July future to a new contract high. Futures subsequently retreated lower, with exhausted buying at the highs and weakness in crude oil futures tempering bullish biodiesel enthusiasm to attract profit-taking pressure, traders said.

 

Soymeal futures ended modestly lower, in step with pullback in the rest of the soy complex. Meal was seemingly at the mercy of spreading between the products, with the reversal of soyoil prices allowing futures to sustain product share, analysts said.

 

July oil share ended unchanged at 42.41%, and the July crush ended at 66 1/4 cents.

 

In soymeal trades, RJ O'Brien bought 1,000 July, JP Morgan bought 800 July, Tenco bought 600 July and ADM Investor Services bought 300 July. Bunge Chicago sold 800 July, JP Morgan sold 600 July, and Fimat and Rand Financial each sold 500 July. Commodity funds were net sellers on the day.

 

In soyoil trades, Fimat and Tenco each bought 600 July, JP Morgan bought 700 July, and Man Financial bought 400 July. Calyon Financial and JP Morgan each bought 400 July, and Tenco sold 500 July.