May 19, 2007

 

CBOT Soy Review on Friday: End mixed; lacked directive influences

 

 

Chicago Board of Trade soybean futures ended narrowly mixed Friday, experiencing another choppy, two-sided session amid the absence of fresh directive influences.

 

July soybeans settled 1/4-cent lower at US$7.92 1/2, and November soybeans finished unchanged at US$8.21 1/4. July soymeal settled US$0.70 lower at US$212.00 per short tonne. July soyoil ended 16 points higher at 35.15 cents a pound.

 

The market was subjected to another tug-o-war between buyers and sellers, with bullish chart signals and weather concerns providing support, while overbought conditions supplied profit taking pressure, analysts said.

 

Spillover support from a push to new highs in soyoil provided support for the market as well. However, after a recent price surge and a lack of an aggressive speculative buying presence, traders were content to book some profits heading into the weekend, analysts added.

 

Nevertheless, the market continues to sustain a higher psychology, a traders added, He cited lingering concerns over dryness in the eastern Midwest and the potential for a La Nina summer keeping traders cautious amid a tightening supply outlook in the 2007-08 marketing year.

 

The DTN Meteorlogix forecast calls for dry, windy and warm weather across all the main U.S. crop areas through the coming weekend. This pattern is a good one for planting and favorable for crop emergence in row crop areas.

 

Several chances for rainfall will move across the central U.S. during the next seven days. Rain of up to one inch is in store for the western Midwest, and up to three-quarters of an inch in the eastern Midwest. The rain will be welcome in the eastern Midwest, where several areas are still below average on rainfall since the first of May. Showers will bring additional topsoil moisture for early growth of corn and soybeans, Meteorlogix forecasts.

 

In pit trades, Fimat bought 400 July, Man Financial bought 300 July, while Tenco and Rand Financial each bought 200 July. Sellers were lightly scattered with Man Financial selling 300 July.

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil rising to new contract highs. Soyoil futures were the star of the soy complex Friday, as the market remains sensitive to fluctuations in energy prices, said a cash connected CBOT broker. Price strength in world vegoils continue to attract speculative buyers, as long-range demand outlooks for biodiesel remains an underpinning feature, analysts said. The most active July future rose to a new contract high and its intraday high was the highest level for a nearby contract on continuation charts since June 1984.

 

Soymeal futures ended lower, pressured by adjustments in the soyoil/soymeal spread relationship amid the recent surge in soyoil prices, analysts said.

 

July oil share ended at 45.33% and the July crush ended at 60 1/2 cents.

 

In soyoil trades, Bunge Chicago bought 800 July, Fimat bought 700 July, and JP Morgan bought 400 July. Sellers were scattered among various commission houses, with Bunge Chicago selling 300 August, while JP Morgan, Citigroup, Rand Financial and UBS Securities each sold 200 July. Speculative fund buying was estimated between 1,000 and 2,000 contracts.

 

In soymeal trades, buying and selling from commission houses was lightly scattered, with Bunge Chicago a seller of 400 July. Speculative funds were estimated light net sellers on the day.