October 4, 2006

 

CBOT Soy Review on Monday: Down as corn, wheat tumble

 

 

Weakness in corn and wheat futures at the Chicago Board of Trade weighed on soy complex futures Tuesday in a light volume trade, analyst said.

 

November soybeans settled 2 3/4 cents lower at US$5.42 1/2 cents per bushel.

 

Wheat was the leader of the grain and oilseed complex, falling due to liquidation on news Argentina's wheat regions received much-needed rains. Losses there spilled over to soybeans, which started the session lower. Soybeans traded weaker overnight and continued the softer theme.

 

News for the market was light, with only the weekly crop progress report from the U.S. Department of Agriculture from Monday news. USDA said 19% of the crop was reported harvested, compared to 33% last year and the five-year average of 26% as rains have delayed cutting.

 

Analysts said any thoughts the delay in harvesting would be friendly was offset by the forecast for dry weather the rest of this week. "It looks wide open this week, we could easily push it 20% or more," said Jerry Gidel, analyst at NARMS.

 

Gidel also noted soybeans remain under pressure as early yield results for soybeans suggest a the crop might be larger than first anticipated, a sentiment several other analysts echoed.

 

In other news, for about an hour, the e-cbot system was down, preventing electronic trade at the CBOT. Pit trade was not affected, but the CBOT did not say what caused the e-cbot malfunction. Electronic trade was shuttered for about an hour early in the day before resuming.

 

Soybean buyers included ABN Amro buying 300 November; Tenco and Citigroup and Iowa Grain each buying 200 November; Man Financial buying 800 November; JP Morgan buying 500 November; Eagle buying 800 November. Sellers included ADM selling 1,000 November; Calyon selling 400 November; Goldenberg selling 500 November; Merrill Lynch selling 400 November; Rosenthal and SA Inc each selling 300 November.

 

In options, Fimat bought 2,000 January US$5.20 puts and bought 2,000 March US$5.20 puts.

 

 

Soy Products

 

Both products were weaker, with soyoil leading the downside. Analysts said losses in crude oil weighed on soyoil as speculators sold the product due to its use in biodiesel. December soymeal settled 80 cents lower at US$162.70 per short tonne and December soyoil fell 27 points to 23.67 cents per pound.

 

Funds were light sellers in soy products, but were more prominent in soyoil.

 

In soymeal, buyers and sellers were scattered. Buyers in soyoil were Bunge buying 300 December; O'Connor buying 1,800 December; and Prudential buying 400 January. Sellers included ABN Amro, R.J. O'Brien and Citigroup each selling 200 December; Fimat and Goldenberg each selling 300 December; Prudential selling 400 December; and Tenco selling 500 December.