September 15, 2006

 

CBOT Soy Review on Thursday: Ends up; extending recovery from lows

 

 

Chicago Board of Trade soybean futures ended higher Thursday, extending their modest recovery from prior lows.

 

September soybeans ended 2 cents higher at US$5.32, and November soybeans finished 4 3/4 cents higher at US$5.45 1/4. December soymeal settled US$0.90 higher at US$159.80 per short tonne, while December soyoil ended 24 points higher at 25.26 cents a pound.

 

The market was supported by technically inspired buying, with strong weekly export sales and a solid monthly crush figure providing added support to sustain the higher tonnee, said Joe Victor, analyst with Allendale Inc. in McHenry, Ill.

 

The market continued to consolidate from Tuesday's contract lows, as talk of overdone losses, firm cash prices and the potential for a frost/freeze next week in the northern Midwest keeping sellers on the run, analysts added.

 

The absence of selling pressure did more for the gains than anything fundamental, said a CBOT commission house broker. The market was overdue for a mild bounce, and with the market only able to produce 4-cent gains on a correction, the bearish outlook has not changed, he added.

 

Upside movement was capped by the November contract's inability to challenge resistance at its 10-day moving average and downward turnaround outside energy and metals markets, analysts said.

 

Nevertheless, higher-than-expected weekly export sales, with China the principal buyer, coupled with the strong start to the marketing year in sales, and good demand for the products driving the crush, give soybeans some underlying support, Victor added.

 

The DTN Meteorlogix forecast calls for temperatures to drop to below to much below normal in the western belt and normal to below normal in the eastern Midwest crop belt Monday and Tuesday. Low temperatures will reach into the 30s to mid-40s Fahrenheit, with the coolest readings over the northwest belt early expected Tuesday and Wednesday morning. Meteorlogix said some scattered frost is possible next week, but will very little crop damage is seen due to overall maturity being well along in the crop cycle.

 

In pit trades, buyers were widely scattered among various commission houses, with ADM Investor Services a buyer of 400 November, and Goldenberg Hehmeyer and Iowa Grain each buying 300 November. Speculative fund buying was estimated at 2,000 lots.

 

On the sell side, Fimat sold 300 November, with ADM Investor Services and Rand Financial each selling 200 November.

 

Day session volume for soybeans on the e-CBOT platform totaled 17,205 contracts.

 

South American soybean futures ended higher, with the November future settling 4 1/2 cents higher at US$5.95.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, moving in step with advances in soybeans. Soyoil futures ended higher, climbing to over one-week highs on technically inspired buying. The market staged a bounce from prior lows, with a lower-than-expected NOPA stocks figure helping the market sustain strength, despite a retreat in crude oil prices, analysts said.

 

Soymeal futures edged higher after a quiet session, garnering strength in soybeans and a modest technical recovery from prior lows, with solid underlying demand an underpinning feature. However, the lack of follow-through buying to push prices above technical resistance capped advances, as did light spreading between the products, traders added.

 

December oil share ended at 44.15%, and the November/October crush ended at 77 1/4 cents.

 

In soymeal trades, Fimat bought 1,000 December, ABN Amro bought 400 December, and JP Morgan bought 300 October. Fortis sold 500 May, Fimat sold 400 October and JP Morgan sold 300 December. Speculative funds were estimated buyers of 1,400 contracts.

 

In soyoil trades, JP Morgan bought 900 December, and Bunge Chicago bought 600 December. Sellers were widely scattered with Fimat a featured seller of 800 December.