June 29, 2006

 

CBOT Soy Review on Wednesday: Edges up, consolidating ahead Of USDA

 

 

Chicago Board of Trade soybean futures ended modestly higher Wednesday, consolidating ahead of Friday's key acreage and stocks reports, analysts said.

 

July soybeans ended 1/2 cent higher at US$5.78 1/2, November soybeans finished 2 1/4 cent higher at US$6.05 3/4, July soymeal settled US$0.40 lower at US$172.70 a short tonne, and December soyoil ended 11 points higher at 26.29 cents a pound.

 

The market satisfied near-term upside technical objectives early in the day but hacked around for the remainder of the session, consolidating as traders take a cautious approach to the market ahead of Friday's U.S. Department of Agriculture reports, said Jack Scoville, analyst with The Price Group in Chicago.

 

Futures extended Tuesday's bounce back gains, benefiting from technical buying and market shorts taking profits, traders said. This was consistent, but the market's inability push above overhead resistance and favorable midday weather forecasts managed to cap advances and trim gains.

 

The afternoon U.S. computer weather model painted a different picture from early morning forecasts. The midday update backed off previous outlooks for a ridge to move into the western Midwest late next week, said Joel Burgio, meteorologist with DTN Meteorlogix Weather Service.

 

The forecast for the western Midwest is not as hot and dry for Thursday and Friday of next week, as the updated model does not have the ridge in the western U.S. moving as far north or east as previously projected, Burgio added.

 

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 150,000 to 400,000 metric tonnes. Soymeal sales are seen falling in a range of 65,000 to 120,000 metric tonnes and soyoil commitments are expected in a range of zero to 10,000 tonnes. USDA will release its acreage and quarterly grain stocks reports Friday 7:30 a.m. CDT.

 

In pit trades, Calyon Financial, Fimat, Goldenberg Hehmeyer and Rand Financial each bought 300 November.

 

On the sell side, ADM Investor Services and DT Trading each sold 300 November.

 

South American soybean futures ended flat, with the July future settling unchanged at US$6.09.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil gaining against soymeal. Soyoil futures extended its rebound from recent lows, buoyed by technically inspired buying. The ability of the most-active December future to push above resistance at the contract's 50-day moving average coupled with support tied to long range outlooks for increased demand kept speculative buyers enthused, following early two-sided action, traders said.

 

Soymeal futures ended narrow mixed, struggling to find direction in two-side trade, as the market continued its consolidative actions, analysts say. Soymeal continues to lose product share to soyoil, with spreading between the products featured.

 

July oil share ended at 42.25%, and the July crush ended at 79 1/2 cents.

 

In soymeal trades, Calyon Financial bought 1,000 December, and Man Financial bought 800 July. JP Morgan sold 500 August and Prudential Financial sold 200 August. Speculative funds were estimated net buyers on the day.

 

In soyoil trades, Man Financial bought 700 August and 400 December, JP Morgan bought 500 December, Bunge Chicago bought 600 December, RJ O'Brien bought 600 August. Fimat sold 600 September, and Citigroup sold 400 December. Speculative funds were estimated buyers of 2,500 lots.