June 21, 2006

 

CBOT Soy Review on Tuesday: Up marginally in sideways trade

 

 

Chicago Board of Trade soybean futures ended Tuesday's session posting marginal gains, consolidating in sideways, two-sided action following Monday's sharp declines.

 

July soybeans ended 3/4-cent higher at US$5.85 1/4, November soybeans finished 1-cent higher at US$6.12 and July soyoil ended 8 points higher at 24.28 cent a pound. July soymeal settled US$0.60 lower at US$177.30 a short tonne.

 

The market managed to find stability after recent setbacks, finding a level of support in the market as favorable crop conditions were previously factored into prices, analysts said.

 

With a long growing season still ahead of the market and lingering concerns over a dry weather pattern in the western Midwest despite recent rains, futures were able to retain risk premium, said a CBOT commission house broker.

 

A sideways choppy tonnee was consistent throughout the day, as the market failed to show any resilience to push prices aggressively in either direction. Futures were pressured by favorable crop conditions, with scattered rains and milder temperatures expected over the next 10 days.

 

After a ban of showers move through the belt in the next couple of days, below normal precipitation is seen for the corn-belt, but limiting any short term stress will be cooler-than-normal temperatures, said Joel Widener, meteorologist with Cropcast.

 

Meanwhile, the DTN Meteorlogix forecast said rainfall of up to one and one-half inches is on tap from central Iowa south through northern Missouri by Thursday. This area was bypassed by rainfall late last week, and the moisture is much needed for continued crop development.

 

Additional rainfall of up to three-quarters of an inch is also in store for the western Midwest (west of the Mississippi River) during the end of the week. Eastern Midwest areas (east of the Mississippi) have up to one inch of rain in store, spreading from Wisconsin and northern Illinois south to the Ohio Valley. The result of these episodes of showers and thunderstorms will be a notable reduction in dry areas of the Midwest by the end of this week, Meteorlogix said.

 

In pit trades, RJ O'Brien bought 600 November. Man Financial sold 500 November, Goldenberg Hehmeyer sold 300 November, and Calyon Financial sold 300 July

 

South American soybean futures ended higher, with the July future settling 1-cent higher at US$6.15.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Tuesday, finding stability after recent volatile moves. Soymeal futures drifted lower, peeling back recent gains, with the exhaustion of soyoil/soymeal spread unwinding left futures without fresh price support, analysts said.

 

Soyoil futures ended higher across the board, bouncing back from Monday's sharp declines. A quiet news front kept the consolidative theme in place, with stability in crude oil futures helping promote the recovery movement in the market, traders said.

 

July oil share ended at 40.64%, and the July crush ended at 72 cents.

 

In soymeal trades, Fimat bought 500 July, Prudential sold 300 August, USA sold 300 September, Rand Financial and Man Financial were light sellers.

 

In soyoil trades, Tenco bought 500 July, Fimat bought 400 July with buying scattered across many commission houses. Sellers were scattered across various commission houses, with JP Morgan a seller of 400 July. Commodity fund selling was estimated near 1,000 lots.