September 1, 2006

 

CBOT Soy Review on Thursday: Narrowly mixed; trims losses late

 

 

Chicago Board of Trade soybean futures ended narrowly mixed Thursday, continuing its sideways, lower theme with late end of month positioning trimming earlier declines.

 

September soybeans ended 1/4 cent higher at US$5.42 1/4 while November soybeans finished unchanged at US$5.55 3/4. December soymeal settled US$0.20 lower at US$161.40 a short tonne, while December soyoil ended 21 points higher at 25.74 cent a pound.

 

The market is having a hard time sustaining any price strength amid assumptions that the 2006 US soybean crop is getting larger amid beneficial weather conditions for filling crops across the Midwest, said Brian Hoops, president Midwest Market Solutions in Yanktonne South Dakota.

 

Bearish crop outlooks are keeping a lid on rallies, and aside from light short covering, futures have little supportive features to attract fresh buying, Hoops added.

 

The lower theme was consistent for most of the day as the market continues to factor in the impact of favorable weather conditions on pod filling soybean crops across the Midwest.

 

The rains in August give soybean crops the potential for maximum seed size in pods, said Palle Pedersen, agronomist with Iowa State University in Ames Iowa.

 

The bearish tonnee is expected to remain intact until a clear indication of crop size is established, with ample U.S. and world inventories remaining a bearish point for the market to overcome, analysts added

 

Meanwhile, the DTN Meteorlogix forecast said continued favorable weather is on tap for Midwest soybean crops in the later stages of filling. Rainfall of up to one inch will develop in the Midwest on Friday and continue through Saturday. These showers will be followed by primarily warm and dry weather during next week.

 

In pit trades, Fimat and DT Trading were key buyers. On the sell side, sellers were scattered among various commission houses, with JP Morgan, RJ O'Brien and Citigroup featured sellers. Speculative funds were net sellers on the day.

 

South American soybean futures ended flat, with the September future settling unchanged at US$6.00.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Thursday, reversing the earlier differential in product prices down the stretch. Soymeal futures ended marginally lower, retracing earlier gains, as a late reversal in the soyoil/soymeal spreading dropped futures into negative territory.

 

Soyoil futures ended higher across the board, recovering early price pressure on end of the day and month positioning. Futures were on the defensive for most of the day, down on sympathetic selling with declines in crude oil futures. However, a late day bounce in energy prices enabled futures to rebound, with end of the day profit taking and commercial buying serving as catalysts for the gains, analysts said.

 

September oil share ended at 44.50%, and the September crush ended at 81 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses.

 

In soyoil trades, Bunge Chicago bought 1,200 December, Fimat bought 300 December, and Tenco bought 200 December. RJ O'Brien sold 600 December, JP Morgan sold 500 December, Citigroup sold 400 December.