July 4, 2007

 

CBOT Soy Review on Tuesday: Lower on pre-holiday position squaring

 

 

Chicago Board of Trade soybean futures ended Tuesday's session posting double digit declines, retracing Monday's gains on pre-holiday position squaring and profit taking.

 

July soybeans settled 14 1/2 cents lower at US$8.65, and November soybeans finished 15 1/2 cents lower at US$8.82 1/4. July soymeal settled US$3.20 lower at US$232.60 per short tonne. July soyoil ended 37 points lower at 36.36 cents a pound.

 

The market took a breather from Friday and Monday's sharp upward push, retreating firmly into negative territory on consolidative sales ahead of the midweek holiday break, analysts said.

 

CBOT markets will be closed Wednesday in observance of the U.S. Independence Day holiday.

 

A quiet news front kept activity light, with traders taking the opportunity to book in some profits and reduce risk ahead of the holiday, a CBOT floor analyst said.

 

Favorable near-term weather conditions for developing crops added to the defensive tonnee, traders said. However, the inability of futures to settle below Monday's lows and the ongoing need for ideal crop conditions this year amid a tightening supply picture for the 2007-08 marketing year, provided support to limit losses, analysts added.

 

The DTN Meteorlogix forecast calls for a pattern with an upper-atmosphere ridge in the west and a trough in the east over the Midwest during the next 5 to 7 days. This pattern features a jet stream track which runs from the Pacific coast east into the Northern Plains, and then southeast through the Midwest. This is a favorable jet stream track for periodic showers, along with a minimizing of any spells of hot weather that develop. In general, conditions will be beneficial for pollinating corn and flowering soybeans, Meteorlogix said.

 

Meanwhile, Cropcast Weather Services said Tuesday's 6- to 10-day weather models appears to have good agreement regarding an expansion of more notable rains through the northern and central Midwest next week.

 

In pit trades, ADM Investor Services and Citigroup each bought 400 November. Tenco sold 1,000 November, UBS Securities sold 800 November, Man Financial and RJ O'Brien each sold 500 November, Iowa Grain sold 400 November and ADM Investor Services sold 300 November. Speculative fund selling was estimated at 6,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, backpedaling in unison with soybeans. Soymeal futures were down on pre-holiday sales, with active contracts consolidating inside Monday's trading range, analysts said. The market made a minor correction following recent price strength, traders added.

 

Soyoil futures settled lower with the rest of the complex, pressured by weakness from soybeans and technically motivated sales, analysts said. Technical sales were featured, as declines accelerated once active contracts filtered down into a chart gap left from Friday spike higher price move, a CBOT floor trader said.

 

July oil share ended at 43.87% and the July crush ended at 61 1/4 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses, with speculative funds estimated net sellers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses. Speculative fund selling was estimated at 1,500 contracts.