July 4, 2006

 

CBOT Soy Review on Monday: Rallies on speculative buys, weather concerns

 

 

Chicago Board of Trade soybean futures ended to the upside Monday, continuing their upward assault from last week's low on speculative buying associated with stressful long-range weather forecasts for the Midwest.

 

July soybeans ended 6 3/4-cent higher at US$6.01 1/2, November soybeans finished 6 3/4 cent higher at US$6.29 1/4, July soymeal settled US$1.10 higher at US$175.70 a short tonne, and December soyoil ended 19 points lower at 26.17 cent a pound.

 

Long-range weather outlooks forecasting hotter and drier conditions for the Midwest served as the catalyst to spark futures to three-week highs, analysts said.

 

Speculative buying was a featured attraction in otherwise subdued trading, as the market added risk premium amid the potential for crop stress in the 8-14-day weather maps, traders said.

 

Market shorts took the opportunity to cover some positions, as traders attempted to reduce risk heading into the Independence Day holiday. CBOT markets will be closed Tuesday in observance of the holiday.

 

Otherwise, futures had little directives to provide direction with outside inflationary markets closed and the U.S. Department of Agriculture's weekly export inspection report postponed to Wednesday, due to technical problems.

 

Meanwhile, the DTN Meteorlogix forecast said drier weather is on tap throughout the region from mid to late week. Temperatures will be less hot, ranging from the mid 80s to low 90s Fahrenheit. Next week brings a return of mainly hot and dry weather. Temperatures will be near to above normal, and rainfall near to below normal, Meteorlogix said.

 

In pit trades, ABN Amro bought 600 November, Rand Financial bought 500 November, Fortis bought 1,200 November and Man Financial bought 400 November. JP Morgan sold 600 November, UBS Securities sold 400 November, Man Financial, Citigroup and Bunge Chicago each sold 300 November.

 

South American soybean futures ended higher, with the July future settling 8-cent higher at US$6.31.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with the unwinding of soyoil/soymeal spreads a featured attraction. Soymeal futures ended higher, buoyed by spillover momentum from soybeans. The market managed to gain some product share amid late declines in soyoil, analysts said.

 

Soyoil futures stumbled lower down the stretch, slipping from earlier gains on late position squaring ahead of the Independence Day holiday. The market had experienced solid gains recently, and was overdue for a setback, a CBOT broker said. The absence of support from crude oil market-that was closed for the holiday-left futures with little underlying support to entice traders into challenging Friday's advances to contract highs, analysts said.

 

July oil share ended at 42.68%, and the July crush ended at 73 cents.

 

In soymeal trades, Man Financial bought 400 December, FCStonnee sold 300 December.

 

In soyoil trades, buyers were scattered among various commission houses, with JP Morgan a buyer of 400 December. JP Morgan sold 600 December, and Man Financial sold 300 December.