August 10, 2006

 

CBOT Soy Review on Wednesday: Climbs on consolidative buying

 

 

Chicago Board of Trade soybean futures ended higher Wednesday, bouncing back from prior losses on consolidative buying amid oversold conditions and pre crop report position evening.

 

August soybeans ended 4 1/2 cents higher at US$5.62, November soybeans finished 3 3/4 cents higher at US$5.80. December soymeal settled US$0.30 higher at US$163.40 a short tonne, while December soyoil ended 34 points higher at 27.18 cent a pound.

 

The market was oversold and due for a bounce, with the exhaustion of speculative fund selling and strength in soyoil, futures were able to find stability after sharp declines in prior sessions, said a CBOT commission house broker.

 

Speculative fund short covering was a featured attraction in otherwise quiet trade, as traders take a cautious approach to market activity until the U.S. Department of Agriculture provides direction with its production and yield forecasts, analysts said.

 

However, bearish technical momentum and favorable near term weather conditions in the Midwest remained hindrances to upside potential, limiting the days advances.

 

Meanwhile, The DTN Meteorlogix forecast calls for several episodes of showers through the weekend across the Midwest. In the eastern Midwest, thundershowers in western Illinois will help to ease stress to filling corn and soybeans but more rain will still be needed in this area. Elsewhere east of the Mississippi River, generally favorable growing conditions continue, Meteorlogix forecasts.

 

During next week, scattered showers and thunderstorms will develop in the northern U.S., but coverage will be limited. As a result, the Midwest, Delta and Plains will all have above-normal temperatures with mostly below-normal rainfall, Meteorlogix added.

 

In pit trades, Tenco bought 600 November, Calyon Financial, Man Financial and Rand Financial each bought 500 November. Calyon Financial sold 1,000 November, with ADM Investor Services and O'Connor each selling 400 November. Speculative fund buying was estimated near 2,000 lots.

 

South American soybean futures ended higher, with the August future settling 5 cents higher at US$6.12.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, with soyoil leading the upward move. Soyoil futures climbed to new highs for the week, bolstered by speculative fund buying, traders said. Technically related buying coupled with enthusiasm related to future biodiesel demand served as the catalysts to keep futures firmly planted in positive territory, analysts say. Futures were allowed to react to crude oil price strength in the absence of defensive activity in soybeans, analysts added.

 

Soymeal futures edged higher, bouncing back from earlier declines on late strength in soybeans. The calming effect of commercial stopping of soymeal deliveries provided underlying support to prices as well, traders added.

 

August oil share ended at 45.38%, and the August crush ended at 76 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with JP Morgan a seller of 400 September and Rand Financial a seller of 300 December.

 

In soyoil trades, Citigroup bought 1,200 March and 400 December, Bunge Chicago bought 500 December, Fimat bought 400 December and Man Financial bought 300 September. Sellers were scattered among various commission houses. Speculative fund buying was estimated near 3,000 lots.