September 27, 2006

 

CBOT Soy Review on Tuesday: Up on spillover, harvest concerns

 

 

Chicago Board of Trade soybean futures settled higher Tuesday, bouncing back from prior losses on borrowed strength from other grains and concerns of harvest slowdowns.

 

November soybeans finished 1 3/4-cent higher at US$5.46 3/4. December soymeal settled US$0.50 higher at US$163.50 per short tonne, while December soyoil ended 5 points lower at 24.13 cents a pound.

 

The soybean market edged higher, as corn and wheat strength served as crutches and talk of the potential for harvesting to fall behind attracted buying amid forecasts for a soggy weekend in the Midwest, said John Kleist of Top Third Ag Marketing in Chicago.

 

Technical buying was a supportive influence, with sellers nervous from Monday's declines covering positions, traders said. A modest technical correction from recent declines with carryover momentum from Monday's late bounce off lows served as the catalyst for the early gains, traders added.

 

Worries that off-and-on showers in the Midwest could keep the cutting pace slow provided underlying support, with news of China buying U.S. soybeans generating demand optimism, analysts added.

 

Nevertheless, bearish fundamental outlooks kept a lid on upside movement, as traders remained on guard for harvest pressure to emerge as ample supplies are poised to generate near-term cash selling, a CBOT broker said.

 

The DTN Meteorlogix forecast said Midwest weather conditions remain favorable for harvest progress during the next 24 hours. However, conditions remain on track for wetter conditions in the six- to ten-day time frame, which covers most of the first week of October. The western Midwest will see normal to above-normal precipitation during next week, with a slightly drier pattern in the eastern Midwest. This weather pattern offers the prospect of more delays in harvest progress, depending on the intensity and duration of rainfall next week, Meteorlogix said in the forecast.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated net buyers on the day.

 

South American soybean futures ended lower, with the November future settling 2 3/4 cents lower at US$6.21 3/4.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed Tuesday, with soymeal managing to gain some product share on spreads. Soymeal edged higher with soybeans, garnering support from technical buying and light support from spreading between the products, analysts said.

 

Soyoil futures ended a two-sided session lower, grinding down on a lack of fresh supportive news and modest weakness from crude oil futures. The soyoil market remains influenced by energy markets on its use as a feedstock for biodiesel fuel, analysts said. The failure of soyoil to sustain early price gains cast a defensive tonnee in the market as well, traders added.

 

December oil share ended at 42.46%, and the November/October crush ended at 72 cents.

 

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

 

In soyoil trades, Fimat and Goldenberg Hehmeyer each bought 300 December, JP Morgan bought 500 December and Rosenthal bought 300 October. Sellers were widely scattered among commission houses, with Prudential Financial and UBS Securities each sellers of 300 December.