September 26, 2007

 

CBOT Soy Review on Tuesday: Lower; consolidates from prior gains

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, quietly carving out modest declines as the market consolidated from its sharp rally during the past month.

 

November soybeans settled 5 3/4 cents lower at US$9.73 and January soybeans ended 5 1/2 cents lower at US$9.89. October soymeal settled US$0.20 higher at US$271.40 per short tonne, and December soymeal settled US$0.50 higher at US$277.60. October soyoil ended 67 points lower at 38.64 cents a pound, and December soyoil finished 64 points lower at 39.19.

 

"I think we're just taking a little bit of a breather, as we are come into the harvest. They'd like to tag along with the wheat, but they just can't do it," said Rich Albaugh, commodity broker for Commodity Services Inc. in Des Moines, Iowa.

 

Broad-based weakness across the commodities in general added to the defensive tonnee, as participants booked profits after the recent run to new highs, analysts said.

 

Otherwise, activity was light with futures range bound for most of the session, with a quiet news front failing to provide a fresh spark to generate momentum, analysts added. Weakness in outside inflationary markets and harvest-related pressure weighed on prices. However, bullish long-range fundamental outlooks limited losses, with traders viewing the declines as more consolidation than a change in the trend, traders said.

 

The need to buy more acres moving toward 2008 remains an underpinning theme, as tightening stock projections and rising global demand are seen drawing down inventories throughout the marketing year, a CBOT floor analyst said.

 

The DTN Meteorlogix Weather Service forecast said any significant rainfall in Brazil during the next 10 days will be confined to Rio Grande do Sul and southern Parana. Hot and dry weather will continue over central Brazil. There is no sign of any significant rainfall developing in northern Mato Grosso until possibly the latter part of the first week of October. Indications are that very little early planting of soybeans in northern Mato Grosso has taken place so far this year.

 

In pit trades, ADM Investor Services and RJ O'Brien each bought 500 November. JP Morgan sold 300 November and Rand Financial sold 400 November. Speculative fund selling was estimated at 1,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil stumbling lower on corrective sales from prior gains.

 

Soyoil futures slipped to two-week lows, as weakness in Malaysian palm oil and crude oil futures attracted profit- taking pressure to firmly plant prices in negative territory, analysts said. Technical selling was featured as well, with the most active December futures' ability to dip well below its 10-day moving average uncovering additional selling interest, analysts added.

 

Soymeal futures ended modestly higher, managing to gain product share at the expense of soyoil. A mild adjustment in the meal/oil spread supported soymeal, but futures ended near unchanged, continuing its consolidative theme, analysts said.

 

December oil share ended at 41.38% and the November/October crush ended at 49 cents.

 

In soymeal trades, buyers and sellers are scattered among various commission houses.

 

In soyoil trades, Bunge Chicago bought 400 December, RJ O'Brien bought 500 December and Citigroup bought 300 December. ADM Investor Services sold 1,300 December and 600 January, Iowa Grain sold 600 December and 300 January. Speculative fund selling was estimated at 4,000 lots.