May 23, 2006

 

CBOT Soy Review on Monday: Lower on speculators sales, favorable weather

 

 

Chicago Board of Trade soybean futures ended Monday's trading session posting modest declines, under pressure from speculative selling amid favorable planting conditions and technical weakness.

 

July soybeans ended 4 1/2 cents lower at US$5.82 1/2; July soymeal settled US$1.20 lower at US$172.20 a short tonne; and July soyoil ended 11 points lower at 24.92 cent a pound.

 

The market was on the defensive for most of the day on pressure from planting prospects, outside influences and technical factors. But the inability of the market to satisfy a downside objective of filtering into a chart gap below US$5.80 basis July allowed futures to briefly bounce into positive territory, said a CBOT commission house broker.

 

The absence of fresh supportive features in the market, with bearish underlying fundamentals limited upside potential. But spillover strength from a sharp bounce in the neighboring wheat market did provide underlying support to prices, traders added.

 

Nevertheless, the pressures associated with abundant supplies and weather conditions conducive for planting and emergence left little for buyers to grab hold of, particularly without supportive influences from outside markets.

 

The DTN Meteorlogix weather outlook said conditions are dry west of the Mississippi River with some scattered showers expected to drop up to an inch of rain Tuesday and Wednesday, which should be beneficial to emerging crops. East of the Mississippi, conditions are wetter and colder. The area saw showers this weekend, and showers should return by Wednesday. Temperatures dropped to the mid-30s in Illinois, Indiana and Ohio, but posed only minimal danger to emerging crops. By the end of the week, temperatures should be back to normal or warmer, Meteorlogix said.

 

The USDA reported Monday that U.S. soybeans inspected for export in the week ended May 18 totaled 5.872 million bushels, down 24.4% from the prior week's 7.771 million. Pre-report estimates forecast the inspection figure would fall within a range from 7 million to 13 million. Accumulated soybean inspections totaled 776.053 million bushels, down 21.0% from the 982.380 million amassed at the same time last year.

 

In other news, a Chinese delegation is expected to sign a memorandum of understanding with the Kansas Soybean Commission on Monday evening to secure bids for approximately 150,000 metric tonnes of high quality Kansas soybeans per year.

 

Argentina's 2005-06 soybean crop was reported 85% harvested as of Thursday, according to the latest data from the Agriculture Secretariat.

 

In pit trades, Citigroup bought 1,000 July; Rand Financial bought 1,500 July; and JP Morgan bought 500 July.

 

On the sell side, Citigroup sold 1,000 November; Man Financial sold 1,000 July; Prudential Financial sold 900 July; and Goldenberg Hehmeyer and Rand Financial were each sellers of 500 July. Commodity funds were estimated sellers of 3,000 contracts on the day.

 

South American soybean futures ended higher, with the July future settling 1 cent higher at US$5.89 1/2.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board Monday, continuing their retreat from previous highs moving in step with declines in soybeans.

 

Soyoil futures were on the defensive for most of the day, falling to 1-month lows on declines in crude oil futures and technical weakness. However, the market's inability to attract aggressive selling at its lows, mixed signals from outside markets and stability in soybeans provided the strength for futures to end near the upper end of the session's trading range.

 

Soymeal futures ended lower, keeping pace with soybeans, as the absence of fresh fundamental influences kept the market in the role of a follower.

 

July oil share ended at 41.99%, and the July crush ended at 69 3/4 cents.

 

In soymeal trades, Fimat and JP Morgan each bought 500 July, and Bunge Chicago bought 400 July. Man Financial sold 1,000 July, and ADM Investor Services and ABN Amro each sold 400 July.

 

In soyoil trades, JP Morgan bought 500 July; Bunge Chicago bought 300 July; Calyon Financial, Citigroup, Fimat and Goldenberg Hehmeyer each bought 200 July; Bunge Chicago sold 800 July; Citigroup sold 600 July; JP Morgan sold 700 July; Fimat sold 400 July; and Iowa Grain, Man Financial and RJ O'Brien each sold 300 July. Commodity funds were estimated sellers of 2,000 contracts.