September 22, 2007

 

CBOT Soy Review on Friday: Settle lower on pre-weekend profit taking

 

 

Chicago Board of Trade soycomplex futures ended lower across the board Friday, backpedaling in a profit taking setback from the week's multi-year gains.

 

November soybeans settled 9 1/2 cents lower at US$9.79 and January soybeans settled 9 3/4 cents lower at US$9.94 1/2. October soymeal settled US$2.60 lower at US$272.70 per short tonne, and December soymeal settled US$2.90 lower at US$278.30. October soyoil ended 45 points lower at 38.99 cents a pound, and December soyoil finished 42 points lower at 39.52.

 

Trade consolidation was a featured attraction in soybean futures, with overbought conditions, and a lack of fresh supportive news to feed market bulls, enticing traders to book some profits ahead of the weekend, analysts said.

 

Overall activity remained quiet throughout, as sellers were unwilling to press the market in the face of bullish long range fundamentals and concerns surrounding early planting concerns amid dry conditions in northern Brazil, analysts added.

 

The market experienced a minor technical correcting in a bull market, as buyers took the opportunity to take breather after setting 3-year highs and pushing deferred months above the US$10.00 per bushel level this week, a CBOT floor broker said.

 

Light pre-harvest selling pressure applied some weakness, but with the need to buy increased global acreage, strong demand and tightening U.S. inventories downside pressure remains limited, he added.

 

The DTN Meteorlogix Weather Service forecast said hot and dry weather remains locked in place over Mato Grosso in central Brazil. There is no sign of any significant rainfall developing in northern Mato Grosso during the next two weeks. It now appears very likely that the usual early round of soybean planting in Mato Grosso which occurs during late September will not take place in 2007 because of the extreme dry conditions. There is no notable sign of this mini-drought breaking until at least the first part of October.

 

In pit trades, Citigroup and UBS Securities each bought 500 November, Rosenthal bought 400 November and Fimat bought 1,000 November. JP Morgan sold 300 November and 500 July.

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, carving out losses on the backs of pre weekend profit taking. The theme was consistent throughout the complex, with traders looking to book some profits and trim risk heading into the weekend.

 

After setting new 3-year highs in soymeal Thursday and new 23 year highs in soyoil earlier in the week, futures were overdue for a day of consolidation, analysts said. Nevertheless, bullish demand prospects and worries over tightening soybean inventories in the 2007-08 marketing year remained underpinning themes to limit downside pressure, analysts added.

 

December oil share ended at 41.52% and the November/October crush ended at 49 3/4 cents.

 

In soymeal trades, Rand Financial bought 600 December, with ADM Investor Services and MF global each sellers of 400 December. Speculative funds were net sellers on the day.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with JP Morgan buying 300 December. RJ O'Brien and JP Morgan each sold 500 December. Speculative fund selling was estimated at 1,500 lots.