June 30, 2006

 

CBOT Soy Review on Thursday: Ends firm; consolidates before USDA data

 

 

Chicago Board of Trade soybean futures ended higher across the board Thursday, continuing their consolidative bounce off recent lows heading into Friday's quarterly grain stocks and acreage reports.

 

July soybeans ended 3 1/4 cents higher at US$5.81 3/4, November soybeans finished 3 3/4 cents higher at US$6.09 1/2, July soymeal settled 30 cents lower at US$172.40 a short tonne, while December soyoil ended 42 points higher at 26.71 cents a pound.

 

Market shorts took the opportunity to take some profits off the table amid the risk of a bullish report on Friday, analysts said.

 

The supportive theme was consistent from the outset, with technically inspired buying a featured attraction after the most active November contract pushed above meaningful resistance levels.

 

Lingering concerns over long-term weather forecasts projecting heat and dryness in the western Midwest provided underlying support, but with favorable near-term weather upside potential remained limited, traders said.

 

The market is trying to talk up a weather story as the market heads to the July 4th holiday, but with 11- to 15-day forecasts typically erratic, futures are having a tough time finding aggressive buyers, said a CBOT commission house broker.

 

The U.S. Department of Agriculture is scheduled to release its acreage and quarterly grain stocks report Friday at 7:30 a.m. CDT. The average of analysts' estimates pegs soybean acreage at 75.132 million acres and June 1 stocks at 1.012 billion bushels.

 

Meanwhile, deliveries against the CBOT July soybean and soyoil contracts on first notice day Friday are expected to be moderate to large, analysts said. Analysts expect deliveries against the CBOT July soybean contract to fall in a range of 500 to 3,000 lots, with most analysts leaning toward a range of 1,000 to 2,000 lots. Soyoil delivery notices are expected in a range of 400 to 2,000 contracts, while soymeal deliveries are seen between none and 210 lots.

 

In pit trades, Calyon Financial bought 1,500 November, Shatkin/Arbor bought 700 November, Iowa Grain, Man Financial, and JP Morgan each bought 500 November, FCStonnee and RJ O'Brien each bought 400 November.

 

On the sell side, Citigroup sold 500 November, and FCStonnee and ABN Amro each sold 400 November. Commodity funds were estimated buyers of 3,500 contracts.

 

South American soybean futures ended higher, with the July futures settling 18 cents higher at US$6.27.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed once again, with soyoil the clear leader of upside movement. Soyoil futures ended firmly planted in positive territory, buoyed by speculative buying on technical strength and bullish enthusiasm tied to energy-related prospects and general commodity price strength, analysts said.

 

Soymeal futures ended on the defensive, succumbing to soyoil/soymeal spreading interest. The absence of fresh fundamental news to attract buying continues to keep futures falling at the mercy of bullish soyoil price moves, said a CBOT commission house broker.

 

July oil share ended at 42.65%, and the July crush ended at 79 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with Fimat selling 1,000 July and JP Morgan selling 1,000 2007 December.

 

In soyoil trades, ADM Investor Services bought 600 August and 400 December, Man Financial bought 900 December, JP Morgan bought 1,000 2007 December, Bunge Chicago and Rand Financial each bought 300 December. Fimat sold 300 December and JP Morgan sold 300 September. Commodity fund buying was estimated at 3,000 lots.