July 8, 2006

 

CBOT Soy Review on Friday: Lower on weather forecasts

 

 

Chicago Board of Trade soybean futures settled lower Friday in choppy, rangebound trading as weather forecasts pressured prices, with traders removing some recently added premium from the market ahead of the weekend, sources said.

 

July soybeans settled 6 1/2 cents lower to US$6.02 per bushel and November soybeans dropped 7 1/2 cents to US$6.27 3/4. December soymeal fell US$3.10 to US$178.40 per short tonne and December soyoil ended 6 points lower at 28.11 cents per pound.

 

The market came under pressure from overnight weather forecasts and followed the tonnee set in overnight activity, sources said.

 

The overnight weather forecasts were a bit negative, so the market took out some premium after the recent rally, a floor analyst said.

 

Midday weather forecasts did little to change the market's direction with those forecasts termed confusing by several floor sources.

 

DTN Meteorologix Weather midday forecast predicted the northwestern section of the U.S. corn belt drier than earlier forecasts, with rain predicted for the southern sections of the western U.S. corn belt. Longer-term forecasts predict the possibility of a heat dome moving into the central U.S. possibly bringing hotter and drier conditions to the region, DTN Meteorologix Weather said.

 

People are always wary in summer markets because of the weather, said Vic Lespinasse. "The forecasts are written in sand and are constantly changing," he said.

 

U.S. weekly export sales were released before the pit session and were 276,500 metric tonnes for the week ended June 29, in line with analysts' expectations.

 

Buyers on Friday included Calyon, which bought 1,600 November. JP Morgan bought 500 November, and Merrill Lynch bought 300 November and ADM bought 200 November.

 

Sellers on Friday included UBS, which sold 500 November. Merrill Lynch sold 700 November, Term sold 300 November, Citigroup sold 300 November and Fimat sold 300 November.

 

South American soybean futures settled lower with the July future settling 9-cents lower at US$6.19.

 

 

Soy Products

 

Soy product futures ended lower with oil/meal spreading the dominant feature as soyoil gained on soymeal, sources said.

 

Crusher and fund buying of the oil/meal spread provided underlying support a commission house analyst said.

 

Soyoil futures set new life-of-contract highs in several months, extending the recent rally. However, light profit taking ahead of the weekend and weaker crude oil prices trimmed the early gains, the analyst added.

 

Soymeal futures were unable to generate any upside enthusiasm as spillover weakness from soybeans and the spread trading pressed meal, a floor trader said.

 

July oil share ended at 43.94% and the July crush calculation ended at 76 1/2 cents.

 

In soymeal trades, Fimat bought 500 December, JP Morgan bought 200 December, DT Trading sold 300 December and FC Stonnee sold 100 December.

 

In soyoil trades, Bunge bought 400 December, Man Financial bought 1,000 December and 400 August, and Fimat bought 400 December. Citigroup sold 700 August, Fimat sold 1,000 December and O'Connor sold 500 December.

 

In spread trading, Calyon Financial sold 300 August and 500 December soymeal and bought 300 August and 500 December soyoil.