September 2, 2006

 

CBOT Soy Review on Friday: Ends on lows; bearish fundamentals weigh

 

 

Chicago Board of Trade soybean futures ended moderately lower Friday, hovering near the low end of the recent trading range as bearish fundamentals continue to weigh on prices.

 

September soybeans ended 3 3/4 cents lower at US$5.38 1/2, November soybeans finished 4 1/4 cents lower at US$5.51 1/2. December soymeal settled unchanged at US$161.40 a short tonne, while December soyoil ended 42 points lower at 25.32 cents a pound.

 

The absence of fresh supportive features in the market is keeping buyers on the sidelines, as favorable crop outlooks and ample world inventories provide little incentive for buyers to step in front of the market, analysts said.

 

The theme was consistent for most of the day, with prices grinding to session lows on the close. The market has maintained a defensive posture over the past few weeks, as beneficial moisture for filling crops is promoting larger crop projections heading toward the fall harvest, said a CBOT commission house broker.

 

Private crop forecasters projecting above 3 billion bushels US soybean crops is the norm at this point, as agronomist say timely August rains provided the opportunity for the crop to maximize yields.

 

Allendale Inc. projected the U.S. soybean crop at 3.109 billion bushels. FCStonnee is scheduled to release its projections after the close, and Informa Economics is expected to release its September 1 crop projections Wednesday ahead of the day session opening.

 

Meanwhile, the DTN Meteorlogix forecast said the Midwest corn and soybean belt will have generally favorable weather into the Labor Day weekend. A round of rainfall of up to one inch is headed for the northwestern and western areas of the region - mostly in Iowa and Minnesota. Lighter rain showers will develop in the eastern Midwest as the weekend continues, Meteorlogix said in the forecast. These showers will not be a major factor in the corn-belt, but may produce some field work delays.

 

In pit trades, Calyon Financial bought 700 November and Shatkin/Arbor bought 400 November.

 

On the sell side, Calyon Financial, Citigroup, Man Financial, and O'Connor each sold 300 November. Speculative funds were light net sellers on the day.

 

South American soybean futures ended lower, with the September future settling 5 cents lower at US$5.95.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Friday, with soyoil losing product share to soymeal. Soyoil futures traded defensively throughout the day, consolidating inside Thursday's trading range, on pre holiday weekend positioning and sympathetic selling with declines in energy futures, traders said.

 

Soymeal futures ended steady to firmer, garnering strength at the expense of soyoil. Corrections in the soyoil/soymeal spreads benefited soymeal, with decent underlying demand helping underpin prices as well, analysts said.

 

September oil share ended at 44.01%, and the September crush ended at 80 3/4 cents.

 

In soymeal trades, Iowa Grain bought 600 December and Term Commodities bought 200 December. JP Morgan, Prudential Financial and Rand Financial were each light sellers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses. Bunge Chicago, JP Morgan and RJ O'Brien each bought 200 December. Citigroup sold 400 October, JP Morgan sold 500 December and Fimat sold 200 December.