July 21, 2006

 

CBOT Soy Review on Thursday: Lower; peeling back from early gains

 

 

Chicago Board of Trade soybean futures carved out modest declines Thursday, peeling back from initial advances on speculative selling amid favorable weather conditions for crops heading into their pod filling stage.

 

August soybeans ended 1 1/2 cents lower at US$5.84 1/4, November soybeans finished 1 3/4 cents lower at US$6.05 1/2, December soymeal settled US$1.30 lower at US$171.40 a short tonne, and December soyoil ended 35 points higher at 27.27 cent a pound.

 

The market remains under the influence of bearish fundamentals, with ample supplies and improved weather outlooks keeping buyers on the sidelines, analysts said.

 

Futures initially attempted to bounce back from their recent doldrums, but without any supportive features to attract buyers, futures quickly slid into negative territory. Updated midday weather maps showing more moisture in the first few days of August - soybeans' critical reproductive stage - coupled with cool, wet near term conditions served as the catalyst to keep sellers in command of price direction, said Vic Lespinasse, CBOT broker with A.G. Edwards and Sons in Chicago.

 

Nevertheless, futures effectively consolidated recent declines, as good underlying technical support near the US$6.00-per-bushel level basis November keeps a floor under prices, while a lack of crop threats and abundant supplies present cautious buying interest to limit advances, analysts add.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said cooling weather with rainfall scattered across the upper Midwest will drop rain on the Minnesota-Wisconsin-Iowa-Illinois intersection, and to the east. That weather pattern is expected to spread by Friday into the Northern and Central Plains, but rainfall will be less, only up to three-quarters of an inch, Meteorlogix said.

 

In pit trades, Tenco bought 700 November, Calyon Financial, RJ O'Brien and Rand Financial each bought 300 November.

 

On the sell side, Iowa Grain sold 1,000 November, Man Financial sold 800 November, JP Morgan and Tenco each sold 600 November, and RJ O'Brien sold 500 November. Speculative funds sold an estimated 2,000 lots.

 

South American soybean futures ended steady, with the August future settling unchanged at US$6.20.

 

 

SOY PRODUCTS

 

CBOT soy products ended mixed, taking separate paths on direction Thursday. Soyoil futures were the dominant player in the complex, divorcing themselves from weakness seen soybeans and soymeal. The market was underpinned by speculative buying tied to bullish prospects for future biodiesel demand, analysts said.

 

Soymeal futures stumbled lower, unable to sustain early advances amid the absence of supportive features to bolster buying interest, with soyoil/soymeal spreading weighing on prices as well, traders added. Meanwhile, a higher-than-expected weekly export sales figure did provide mild support to limit declines.

 

August oil share ended at 44.05%, and the August crush ended at 75 1/4 cents.

 

In soymeal trades, ADM Investor Services bought 1,200 December, Iowa Grain bought 700 December, and JP Morgan bought 600 December. JP Morgan sold 500 December, and Calyon Financial sold 300 December.

 

In soyoil trades, Citigroup bought 1,800 December, Rand Financial bought 800 December, Rosenthal and JP Morgan each bought 500 December, and Man Financial bought 400 December. Bunge Chicago, Tenco and UBS securities each sold 400 December. Speculative fund buying was estimated at 3,500 contracts.