May 17, 2006

 

CBOT Soy Review on Tuesday: End lower on tech sales, planting outlooks

 

 

Chicago Board of Trade soybean futures ended modestly lower Tuesday, continuing its retreat from prior gains on technical selling and improved planting prospects for the Midwest.

 

July soybeans ended 1 3/4 cent lower at US$6.02 3/4, July soymeal settled US$1.20 lower at US$176.20 a short tonne, while July soyoil ended 22 points higher at 25.71 cent a pound.

 

The potential for a rapid pickup in seedings across the Midwest based on longer range weather forecasts served as the catalyst to keep prices on the defensive, despite Monday's planting progress data showing seedings lagging behind the average pace, said Jason Roose, analyst with U.S. Commodities in West Des Moines, Iowa.

 

Technical selling kick started the losses, but the lack of follow through selling at session lows coupled with a turnaround in soyoil futures provided enough support to limit downside movement, traders added.

 

The market hovered in a range for most of the day, struggling to break out of its range amid the absence of directive forces to move prices, traders said. Traders remained hesitant of pressing the market, as the trade continues to look over their shoulders at outside markets for signs that may inspire fresh speculative activity, said a CBOT commission house broker.

 

Meanwhile, the DTN Meteorlogix weather outlook said temperatures will remain mostly below normal across the Midwest during the rest of this week. The coolest readings will be in Minnesota southeast through the Great Lakes, due to a new cool front moving into the northern Midwest through the eastern Midwest from south-central Canada. Warmer temperatures are in store for the region next week. This warming trend will be very important for enabling crops to resume their growth cycles, Meteorlogix said.

 

In pit trades, Rand Financial bought 500 July, Man Financial, Refco and Tenco each bought 300 July.

 

On the sell side, Calyon Financial sold 600 July, Rand Financial sold 500 July, FCStonnee sold 300 July, ABN Amro, Citigroup, Fimat, Goldenberg Hehmeyer and RJ O'Brien each sold 200 July. South American soybean futures ended higher, with the July future settling 10 cents higher at US$6.10. In the second day of side-by-side trading for South American soybeans, 37 July futures were traded on the electronic platform, according data from CBOT's Market Information Department.

 

 

SOY PRODUCTS

 

Soyoil futures bounced back from Monday's losses, scoring an outside higher day on technical charts. Technically inspired buying helped soyoil recover from early losses, with strength in crude oil futures continuing to influence prices amid optimistic biodiesel enthusiasm, analysts said.

 

Soymeal futures were lower in step with soybeans, pressured by soyoil/soymeal spreading. The strength of soyoil continues to dictate daily price action, with seasonal slow downs in domestic use and exports limiting the market's upside potential, said a CBOT commission house broker.

 

July oil share climbed to 42.18%, and the July crush ended at 67 3/4 cents.

 

In soymeal trades, Fimat bought 1,200 July and JP Morgan bought 200 July. Iowa Grain and JP Morgan each sold 300 July.

 

In soyoil trades, Fimat bought 700 July, Rand Financial bought 1,000 July, UBS Securities bought 600 July, Man Financial bought 300 July and 300 December, Calyon Financial and Citigroup each bought 400 July, Bunge Chicago bought 300 July. ADM Investor Services and Iowa Grain each sold 500 July, RJ O'Brien sold 300 July, Bunge Chicago, Citigroup, and JP Morgan each sold 200 July.