September 25, 2007

 

CBOT Soy Review on Monday: Ends mixed in choppy, two-sided trade

 

 

Chicago Board of Trade soybean futures ended Monday's day session narrowly mixed after chopping around on both sides of unchanged levels during the course of the day, analysts said.

 

November soybeans settled 1/4 cent lower at US$9.78 3/4 and January soybeans ended unchanged at US$9.94 1/2. October soymeal settled US$1.50 lower at US$271.50 per short tonne, and December soymeal settled US$1.20 lower at US$277.10. October soyoil ended 32 points higher at 39.31 cents a pound, and December soyoil finished 31 points higher at 39.83.

 

The market struggled to find lasting direction, with bullish fundamental outlooks offset by overbought conditions and a lack of a supportive influence from outside inflationary markets, analysts said.

 

The stabilization of the U.S. dollar, weakness in crude oil and metals took some inflationary fears out of the market, with the liquidation of some weaker longs amid the raising of CBOT soybean margins adding pressure as well, said Mike Zuzolo, analyst with Risk Management Commodities Inc.

 

The inability of wheat futures to hold sharp early gains, coupled with hedge-related selling and a lack of speculative buying at the highs, attracted sellers to pressure prices, analysts added.

 

Nevertheless, a strong fundamental outlook amid tightening supply outlooks, with talk of planting uncertainties in Brazil and the need to ration demand, continues to keep downside pressure limited, traders added.

 

The DTN Meteorlogix Weather Service forecast said weekend rains in Brazil were confined to some heavy storms in Rio Grande Do Sul province in the south. Mato Grosso continued to be hot and dry. There is no sign of any significant rainfall developing in northern Mato Grosso until possibly the latter part of the first week of October. Early planting of soybeans in northern Mato Grosso will not take place this year, Meteorlogix said.

 

The U.S. Department of Agriculture reported 16.722 million bushels of soybeans were inspected for export in the week ended Sept. 20. The figure is up 43.9% from the 11.623 million reported in the previous week. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 7 million to 15 million bushels.

 

USDA announced Monday private exporters reported the sale of 120,000 metric tonnes of soybeans to China for delivery in the 2007-08 marketing year.

 

USDA is scheduled to release its weekly crop progress report Monday by 4 p.m. EDT. Analysts anticipate the U.S. soybean harvest at 8% to 12% complete.

 

In pit trades, ADM Investor Services and Tenco each bought 300 November, and RJ O'Brien bought 1,000 January. Sellers were lightly scattered among various commission houses. In options, MF Global bought 1,300 November US$9.20 puts.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil futures gaining product share versus soymeal. Soyoil futures ended higher across the board, rallying on borrowed strength from Malaysian palm oil futures and the unwinding of meal/oil spreads, analysts said. Meanwhile, weakness in crude oil futures managed to limit advances, with light profit taking emerging once soybeans and wheat pulled back from their highs, traders added.

 

Soymeal futures ended lower, backpedaling on a lack of fresh supportive inputs, and an adjustment in the meal/oil spread that enticed some longs to unwind some length in meal versus soyoil, analysts said.

 

December oil share ended at 41.82% and the November/October crush ended at 50 1/4 cents.

 

In soymeal trades, ADM Investor Services bought 700 December. Rand Financial sold 400 December, and Penson GHCO sold 300 December.

 

In soyoil trades, speculative fund buying was estimated at 4,500 contracts. ADM Investor Services bought 500 December, JP Morgan, MF Global and Rand Financial each bought 400 December, Fimat bought 300 December, and RJ O'Brien bought 300 December and 300 January. Sellers were lightly scattered among various commission houses.