September 26, 2006

 

CBOT Soy Review on Monday: Lower; harvest weather sparks speculative sales

 

 

Chicago Board of Trade soybean futures ended lower Monday, extending Friday's retreat from prior gains on speculative sales amid improved harvest conditions in the U.S. Midwest.

 

November soybeans finished 4 1/4 cents lower at US$5.45. December soymeal settled US$2.30 lower at US$163.00 per short tonne, while December soyoil ended 4 points lower at 24.18 cents a pound.

 

Speculative-led selling was a driving force in the declines, with weather outlooks that promote open opportunities for harvest operations this week provided fundamental pressure, analysts said.

 

Concerns cash sales will increase amid improved harvest prospects in the face of large old-crop supplies kept bearish waves filtering through the market, traders added. Early weakness in outside markets with metals and energy prices down helped extend the losses, as speculative buyers were sidelined in the face of broad-based commodity weakness.

 

However, futures managed to find stability as the market unfolded, with a late bounce in soyoil and recovery in crude oil managing to trim early losses, traders added.

 

The DTN Meteorlogix forecast said weather conditions will be favorable for harvest progress in corn and soybean fields for most of this week in the Midwest. Mainly dry conditions will consistent in the entire Midwest through Tuesday. Showers will develop across the region by midweek, but rainfall will be no more than one-half inch, heaviest in Indiana and Ohio. Areas of the western Midwest that had heavy rain recently will have less than one-quarter inch of rain; thus, harvest conditions will be favorable, Meteorlogix said in the forecast.

 

After the close, U.S. Department of Agriculture is scheduled to release its weekly crop progress report 3:00 p.m. CDT. Analysts anticipate U.S. soybean harvest progress at 10%-12% complete.

 

In pit trades, Fimat bought 800 November, Man Financial and JP Morgan each bought 500 November.

 

On the sell side, ABN Amro sold 1,000 November, Man Financial sold 700 November, Shatkin/Arbor sold 500 November and Tenco sold 500 Tenco. Bunge Chicago, FCStonnee, Citigroup, Rand Financial and JP Morgan each sold 300 November. Speculative finds were estimated sellers of 3,500 contracts.

 

Day session volume for soybeans on the e-CBOT platform totaled 33,515 contracts.

 

South American soybean futures ended higher, with the November future settling 7 cents higher at US$6.24 1/2.

 

 

SOY PRODUCTS

 

Soymeal futures ended lower across the board, stumbling lower in step with soybeans, with a late recovery in soyoil applying additional pressure on spreads, analysts said.

 

Soyoil futures ended mixed, finishing near session highs, as the exhaustion of early speculative selling pressure coupled with late strength in crude oil stemmed the tide of the losses, analysts said. The most active December future fell to it lowest level since April 7, before finding support at lower levels.

 

December oil share ended at 42.59%, and the November/October crush ended at 74 1/4 cents.

 

In soymeal trades, buyers were scattered across various commission houses. Man Financial sold 700 December, Calyon Financial and JP Morgan each sold 500 December, FCStonnee sold 400 October, and Iowa Grain and Fortis each sold 400 December. Speculative fund selling was estimated at 2,500 contracts.

 

In soyoil trades, RJ O'Brien bought 1,100 December, Bunge Chicago and Citigroup each bought 400 December, and JP Morgan bought 600 December. Man Financial sold 2,000 December, RJ O'Brien, Rand Financial, and Tenco each sold 800 December, and Fimat sold 500 December. Speculative fund selling was estimated between 4,000 and 5,000 December.