August 16, 2006

 

CBOT Soy Review on Tuesday: Mixed; consolidates recent declines

 

 

CBOT soybean futures ended narrowly mixed Tuesday, struggling to find direction, as the market consolidated following recent declines.

 

September soybeans ended 1/4-cent higher at US$5.56 1/2, November soybeans finished unchanged at US$5.69 1/4. December soymeal settled US$0.70 lower at US$164.10 a short tonne, while December soyoil ended 20 points higher at 25.92 cents a pound.

 

The market had reached oversold conditions, and with speculative fund selling exhausted late in Monday's session, futures found support to stabilize the current downtrend, analysts said.

 

Nevertheless, futures experienced a choppy two-sided session, with traders showing indecision, as strength from oversold conditions and bearish fundamental outlooks failed to encourage aggressive activity on either side of the market, traders added.

 

The overall theme of the market remains defensive, with near-term weather promoting prospects of larger yields and abundant supplies adding to the bearish scenario, traders add. Meanwhile, bearish fundamentals are adequately factored into prices, and with demand potential encouraging amid the competitiveness of U.S. prices in relation to Brazil, future demand looks optimistic, a CBOT commission house broker said.

 

Meanwhile, the DTN Meteorlogix forecast calls for warm and dry weather in the Midwest and the northern Plains over the next three days. However, by the end of this week, a new round of showers and thunderstorms could bring rainfall of up to one inch to the northern and western Midwest, and up to three-quarters of an inch in the eastern Midwest.

 

In pit trades, ADM Investor Services bought 500 September, Bunge Chicago bought 400 November, and Man Financial and Tenco each bought 300 November.

 

On the sell side, Calyon Financial and DT Trading each sold 500 November, O'Connor sold 400 November, and Fimat and RJ O'Brien each sold 300 November.

 

South American soybean futures ended higher, with the September future settling 4 cents higher at US$6.04.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed with both soyoil and soymeal futures consolidating in sideways trade. Soyoil futures carved out moderate gains, bouncing back from prior losses. Trade consolidation was a featured attraction, with biodiesel enthusiasm and the ability of the December contract to fill a gap on technical charts attracting buyers to underpin prices, analysts said.

 

Soymeal futures settled modestly lower, drifting back from early gains on a lack of follow-through buying and light soyoil/soymeal spreading.

 

August oil share ended at 44.25%, and the August crush ended at 74 1/2 cents.

 

In soymeal trades, Rand Financial bought 500 December, Prudential Financial sold 400 December and JP Morgan sold 300 December. Speculative funds were light net sellers on the day.

 

In soyoil trades, Fimat bought 600 December, Bunge Chicago and Tenco each bought 400 December, and Iowa Grain bought 300 December. Man Financial sold 700 December, Fimat and Calyon Financial each sold 500 December, Citigroup sold 400 December, and Tenco sold 300 December.