June 22, 2006

 

CBOT Soy Review on Wednesday: End higher after choppy,two-sided session

 

 

Soybean futures on the Chicago Board of Trade finished Wednesday's session posting modest gains, managing to edge higher after chopping around in two-sided trade for most of the day.

 

July soybeans ended 1-cent higher at US$5.86 1/4, November soybeans finished 3/4-cent higher at US$6.12 3/4, July soymeal settled US$0.80 higher at US$178.10 a short tonne and July soyoil ended 16 points higher at 24.44 cent a pound.

 

A quiet news front failed to provide direction, and with favorable crop conditions already dialed into prices, futures consolidated recent declines, analysts said.

 

Spillover strength from neighboring grain futures as well as light strength from outside inflationary markets managed to underpin prices, as traders remain reluctant to fully extract weather premium from the market with a long growing season still ahead, said a CBOT commission house broker.

 

However, favorable near-term crop conditions with non-threatening weather forecast for the Midwest capped upside potential, as traders were unwilling to aggressively push prices in either direction. Otherwise, spread rolling ahead of first notice day-June 30, were featured attractions.

 

Meanwhile, the DTN Meteorlogix forecast said a stationary front winding its way from west to east across the central Plains and Midwest will produce showers and storms and bring up to three-quarters of an inch of rainfall to the western Midwest (west of the Mississippi River; and up to one inch of rain to the eastern Midwest (east of the Mississippi) in the next 48 hours. Precipitation will tail off by the end of the week, Meteorlogix said.

 

On tap for Thursday, U.S. Census Bureau is scheduled to release its U.S. soybean crush report at 7 a.m. CDT for May. The crush is expected to be 144.5 million bushels, up from April's crush figure of 135.3 million bushels, according to analysts' estimates in a Dow Jones Newswires survey. Soyoil stocks are seen increasing to 2.888 billion pounds in the report, up from 2.760 billion the previous month. May soymeal stocks are seen stable at 377,300 short tonnes, mostly on par with the 379,900 reported for April.

 

The U.S. Department of Agriculture is scheduled to release its weekly export sales report Thursday at 7:30 a.m. CDT. Analyst forecast soybean commitments in a range of 100,000 to 400,000 metric tonnes. Soymeal sales are seen falling in a range of 50,000 to 125,000 metric tonnes and soyoil commitments are expected in a range of zero to 6,000 tonnes.

 

In pit trades, Man Financial and Tenco each bought 700 November, ABN Amro, Calyon Financial, and JP Morgan each bought 300 November.

 

On the sell side, ABN Amro sold 400 November, Kottke and FCStonnee each sold 300 November. In spreads, RJ O'Brien spread 4,500 July/November

 

South American soybean futures ended flat, with the July future settling unchanged at US$6.15.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soyoil posting the strongest gains in the products. Soyoil futures ended higher across the board, bouncing back from prior declines, with borrowed momentum from higher crude oil futures aiding the upward tonnee, analysts said.

 

Soymeal futures finished higher, buoyed by spillover strength from soybeans. However, a recovery in soyoil futures attracted soyoil/soymeal spreading to limit upside movement, traders said.

 

July oil share ended at 40.69%, and the July crush ended at 74 1/2 cents.

 

In soymeal trades, Calyon Financial bought 300 July and Man Financial bought 400 July and 300 September. Calyon Financial sold 300 July, Bunge Chicago sold 200 July and 200 August.

 

In soyoil trades, Calyon Financial bought 500 December, and Rand Financial bought 600 December. O'Connor sold 300 December. Commodity fund buying was estimated at 1,300 lots. -By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com