June 14, 2007

 

CBOT Soy Review on Wednesday: Closes slightly lower on profit-taking

 

 

Chicago Board of Trade soybean futures finished slightly lower Wednesday on profit-taking pressure and ideas the market was in an overbought condition after recent gains, floor traders and analysts said.

 

July soybeans ended down 3/4 cent at US$8.25 3/4, and November soybeans closed 1/2 cent lower at US$8.59 3/4. July soymeal rose US$0.80 to US$230.00 per short tonne, and July soyoil fell 40 points to 34.87 cents per pound.

 

"Soybeans have rallied a lot and are somewhat overbought," an analyst said. "I think the soybean market is just at a point where it's a high price and it's just having a hard time finding buyers."

 

In pit trades, Rand Financial bought 400 July, while JP Morgan bought 300 July and Term Commodities bought 300 November. Citigroup and Prudential each sold 200 July. Commodity funds were called even.

 

Soybeans trimmed losses before the close, however, as CBOT corn and wheat climbed. Midday forecasts for drier and warmer weather in the U.S. eastern corn belt supported corn, while U.S. wheat futures advanced on technical buying, concerns about damage to hard red winter and tight global stocks, traders said.

 

The midday forecasts were also seen as friendly for soybean prices as dryness in the eastern corn belt has stressed the developing crop, traders added.

 

In an update to its daily forecast, T-Storm Weather reported rain chances appeared "less than ideal" for the driest areas of the U.S. eastern corn belt during the weekend. Highs could reach into the 90s Fahrenheit during that period, the weather firm said.

 

"This is important because rain chances need to dramatically increase to end dryness deficits that have continued for many weeks," T-Storm said in the update.

 

Looking forward, soybeans should remain focused on the weather, an analyst said.

 

"Really, it's at a point where the weather is going to be key," he said. "In the short-term, a lot can happen."

 

The U.S. Department of Agriculture is scheduled to release weekly export sales figures at 8:30 a.m. EDT Thursday. Analysts predict soybean sales of 100,000 to 250,000 metric tonnes.

 

 

SOY PRODUCTS

  

CBOT soy product futures ended mixed as sharp overnight losses in Malaysian palm oil weighed on soyoil, traders said. Soymeal traded lower with soybeans for much of the day session but shook off weakness on late speculative buying, they added.

 

Commodity funds bought an estimated 500 soymeal contracts and sold an estimated 1,500 soyoil contracts. In soyoil pit trades, Iowa Grains bought 500 July, while UBS sold 600 July and Fimat sold 600 July. Rand Financial spread 1,000 December/July soyoil.

 

In soymeal pit trades, Fimat bought 400 December and spread 1,000 December/July. Rand Financial also spread 800 December/July soymeal, and Iowa Grains spread 1,000 July/December soymeal.

 

Analysts predict weekly soymeal export sales of 50,000 to 150,000 metric tonnes and soyoil sales of nothing to 10,000 tonnes.