May 31, 2006

 

CBOT Soy Review on Tuesday: Up; outside markets support

 

 

Chicago Board of Trade soybean futures ended Tuesday's session with modest gains, supported by influences of higher precious metals and energy markets.

 

July soybeans ended 1 cent higher at US$5.83 1/2, July soymeal settled US$1.40 lower at US$171.90 a short tonne, while July soyoil ended 29 points higher at 25.40 cent a pound.

 

Speculative buying was a key driver of the gains, with strength in inflationary markets attracting fresh buyers as the absence of fundamental support did not provide much else for the market to edge higher on, said Jack Scoville, analyst with the Price Group in Chicago.

 

Spillover momentum from soyoil amid its biodiesel relationship to crude oil futures added to the price strength, while a late decline in CBOT wheat did manage to take some edge off prices, traders added.

 

The market pushed higher from the outset, setting session highs in the first half-hour of trading, but with plantings in pretty good shape, favorable near-term weather outlooks and bearish supplies, the market failed sustain the advances and settled into a narrow range for most of the day, said a CBOT broker.

 

Meanwhile, the DTN Meteorlogix weather outlook said in the Midwest, the forecast calls for rainfall of up to one inch west of the Mississippi River into Wednesday. Most of the heavier precipitation will occur from eastern Iowa southwest into northern Missouri and southeastern Nebraska. This rain will be very important for crops following hot weather with some record-breaking high temperatures of the past weekend. The area east of the Mississippi will have showers and thunderstorms into Wednesday as well, with rainfall of up to one inch. All areas of the Midwest will be mainly dry during the last half of the week, Meteorlogix added.

 

The U.S. Department Agriculture is scheduled to release its weekly crop progress report at 1500 CDT Tuesday, with analysts anticipating plantings in the 80% complete range. Early Tuesday, USDA said U.S. soybeans inspected for export in the week ended May 25 totaled 10.505 million bushels, up 66% from the prior week's 6.329 million. Pre-report estimates forecast the inspection figure would fall within a range from 7 million to 12 million.

 

In pit trades, JP Morgan bought 1,000 July, Refco bought 500 July, Fimat bought 400 July and RJ O'Brien bought 300 July.

 

On the sell side, Man Financial sold 1,000 July, ADM Investor Services sold 400 July, Refco sold 300 July and FCStonnee sold 300 November. Commodity funds were estimated as net buyers on the day.

 

South American soybean futures ended flat, with the July future settling unchanged at US$5.95.

 

 

SOY PRODUCTS

 

Soyoil futures ended higher across the board, emerging as the strongest component of the soy complex. Speculative-led buying fueled the advances, as sympathetic buying with rallying crude oil futures kept futures firmly underpinned. Commodities with energy-related components such as biodiesel derived from vegetable oils received a boost from outside markets, analysts said.

 

Soymeal futures ended lower, falling on soyoil/soymeal spreading amid the absence of supportive fundamental influences to sustain early upside movement, traders said.

 

July oil share ended at 42.48%, and the July crush ended at 74 cents.

 

In soyoil trades, RJ O'Brien bought 1,000 July, JP Morgan bought 500 July and 300 August, and Man Financial bought 400 July. JP Morgan sold 500 July, ADM Investor Services, FCStonnee and Tenco each sold 300 July and Bunge Chicago sold 400 July. Commodity fund buying was estimated at 2,500 lots.

 

In soymeal trades, ADM Investor Services bought 500 July, Fimat bought 800 July and O'Connor bought 300 December. Fimat sold 600 July, Citigroup sold 500 December, Bunge Chicago sold 400 December, Calyon Financial sold 500 July, and Man Financial and O'Connor were each sellers of 400 July. Commodity fund selling was estimated at 2,000 contracts.