July 22, 2006

 

CBOT Soy Review on Friday: Lower; stumbles to 3 1/2-week lows

 

 

Chicago Board of Trade soybean futures ended Friday's session on the defensive, stumbling to 3 1/2-week lows on speculative selling amid the absence of an adverse weather threat to underpin prices.

 

August soybeans ended 7 1/4-cents lower at US$5.77, November soybeans finished 7-cents lower at US$5.98 1/2. For the week November soybeans dropped 26 1/2 cents, and are down 41 cents from the July high of US$6.39 1/2 set on July 11.

 

December soymeal settled US$1.00 lower at US$170.40 a short tonne, while December soyoil ended 23 points lower at 27.04 cent a pound.

 

The lack of supportive features to attract buyers to the market kept futures trending lower, with favorable near term crop conditions in the Midwest and technical pressures serving as catalysts to promote the lower tonnee, analyst said.

 

The lower theme was consistent from the outset, as traders were comfortable extracting risk premium from prices heading into a weekend with cool, wet conditions on tap for crops entering their pod filling stage of development. Technical selling helped cement prices in negative territory, with futures quickly settling into a narrow trading range after satisfying a near term downside objective of penetrating support at US$6.00 basis November futures, traders said.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said temperatures are still tending to be warm to hot in the Midwest, but light scattered showers across the Midwest over the weekend will help conditions. East of the Mississippi, the outlook for temperatures and precipitation is better than to the west, with the exception of west-central Illinois, where dryness is a concern, Meteorlogix said.

 

In pit trades, Tenco bought 1,000 November, FCStonnee, Calyon Financial, Fimat, and O'Connor each bought 500 November.

 

On the sell side, ADM Investor Services sold 800 November, ABN Amro and JP Morgan each sold 1,000 November, Rand Financial sold 600 November, Iowa Grain, Man Financial, Refco, Tenco and UBS Securities each sold 500 November. Speculative funds were estimated sellers of 6,000 contracts.

 

South American soybean futures ended higher, with the August future settling 10 cents higher at US$6.30.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, moving in step with the declines in soybeans. Soymeal futures fell to new contract lows, pressured by speculative selling, as the absence of fresh news or supportive fundamental features kept the market mirroring soybean's declines, traders said.

 

Soyoil futures drifted lower, peeling back Thursday's gains. The defensive tonnee in the soy complex weighed on futures, but the market continued its consolidative theme, with optimistic outlooks for future biodiesel demand limiting downside movement, analysts said

 

August oil share ended at 44.01%, and the August crush ended at 77 1/4 cents.

 

In soymeal trades, Man Financial and Citigroup were featured buyers. Fortis sold 500 December, Fimat sold 400 December and Man Financial sold 400 August. Speculative funds were estimated sellers of near 2,000 contracts.

 

In soyoil trades, JP Morgan and Tenco each bought 400 December, Rosenthal bought 400 March, and Rand Financial bought 300 December. Man Financial sold 500 December, Rand Financial sold 200 August and 300 December.