May 18, 2007

 

CBOT Soy Review on Thursday: Mostly flat; pauses after recent gains

 

 

Chicago Board of Trade soybean futures ended mostly flat Thursday, pausing after a 4-day string of speculative buying induced price gains, analysts said.

 

July soybeans settled unchanged at US$7.92 3/4, and November soybeans finished unchanged at US$8.21 1/4. July soymeal settled US$0.50 lower at US$212.70 per short tonne. July soyoil ended 26 points higher at 34.99 cents a pound.

 

The market experienced choppy, two-sided trade over the course of the day, with consolidative price action taking center stage as aggressive speculative buying paused after a strong buying pace during the past 4-days, analysts said.

 

Overbought market conditions applied modest pressure to generate corrective action, while supportive chart signals, borrowed strength from soyoil futures and lingering concerns over potential crop threats served as underpinning features, analysts added.

 

Otherwise, activity was relatively quiet, with traders content to take a breather from recent action as speculative funds remained seemingly idle during the day, a CBOT floor broker said.

 

Meanwhile, the DTN Meteorlogix forecast calls for dry weather across the Midwest through this coming weekend. Some chilly temperatures have developed, but a killing frost is not expected. This weather pattern is favorable for field work and planting in all but the hardest-hit flood areas of the western Midwest. In addition, temperatures will be variable; generally mild, and favorable for early crop growth.

 

Next week, showers and thunderstorms will develop Monday in the western Midwest, and will spread eastward across the entire corn and soybean belt as the week progresses. Rainfall next week will be normal to above normal in the western Midwest, and near normal to below normal in the eastern Midwest, Meteorlogix reports.

 

In pit trades, ADM Investor Services and Man Financial each bought 500 July, RJ O'Brien bought 400 July. JP Morgan and Rand Financial each sold 400 July. Speculative funds were estimated buyers of 1,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Thursday, with soyoil regaining product share on speculative buying. Soyoil surged to new contract highs, with the most active July futures rallying to its highest levels for a nearby contract on continuation charts since March 2004. Borrowed strength from crude oil futures and bullish long range demand outlooks for global vegoils attributed to biodiesel attracted speculative buying, analysts said.

 

Soymeal futures ended with modest declines, backpedaling from six-week highs set earlier in the session. Trade consolidation was featured after early buying was exhausted, with soyoil/soymeal spreading surfacing to pin prices in negative territory, analysts said.

 

July oil share ended at 45.13% and the July crush ended at 60 cents.

 

In soyoil trades, Fimat bought 700 July, ADM Investor Services and RJ O'Brien each bought 300 July. Bunge Chicago sold 500 July, and UBS Securities sold 600 July. Speculative fund buying was estimated between 2,000 and 3,000 contracts.

 

In soymeal trades, speculative funds were light net buyers on the day, with buyers and sellers lightly scattered among various commission houses.