October 7, 2006

 

CBOT Soy Review on Friday: Ends lower; consolidates early gains

 

 

Chicago Board of Trade soybean futures ended Friday's session posting modest declines, scaling back earlier gains on end of the week position squaring and light pre weekend hedging.

 

November soybeans finished 1 1/2 cents lower at US$5.64. December soymeal settled US$1.80 lower at US$167.80 per short tonne, while December soyoil ended 16 points higher at 24.22 cents a pound.

 

The market bounced to new highs for the current move, but as buying interest and spillover support from other market's dried up, traders squared some positions ahead of a perceived active harvest weekend, analysts said.

 

Light pre-weekend hedge-related selling following recent gains added to the declines, as the market consolidated its upside move to nearly two-month highs, traders added.

 

Otherwise, activity was light, with a quiet news front failing to provide any incentives to aggressively push the market, traders said. Nevertheless, bearish underlying fundamentals applied light pressure to cap upside momentum, as outlooks for record new-crop production and ample old-crop carryover supplies continue to weigh on prices, traders added.

 

Meanwhile, the DTN Meteorlogix forecast said mainly dry weather is on tap for Midwest during the weekend. A few showers may develop in the western areas (west of the Mississippi River) Saturday night and Sunday, but harvest conditions will be favorable.

 

Next week, the first major cold wave of the season will move from central Canada, south into the central U.S. Freezing temperatures will occur in many areas of the Midwest by the end of next week. In corn and soybean areas, the cold snap will cause little significant crop damage, Meteorlogix reports.

 

Looking ahead to Monday, weekly export inspections and weekly crop progress reports from U.S. Department of Agriculture will be postponed to Tuesday due to Monday's Columbus Day holiday.

 

In pit trades, Calyon Financial bought 500 November, Man Financial and Shatkin/Arbor each bought 400 November. Citigroup, Fimat, Goldenberg Hehmeyer and JP Morgan each bought 300 November. Man Financial sold 600 November and Rosenthal was a seller of 300 November.

 

 

SOY PRODUCTS

 

Soy products ended mixed, with ended of the week positioning a featured attraction. Soymeal futures ended lower across the board, pulling back from earlier gains as the market consolidated the week's gains heading into the weekend, analysts said. A setback in soybeans helped to promote the lower tonnee.

 

Soyoil futures ended higher, underpinned by activity in product spreads. Futures managed to extend their recovery from recent declines, bouncing back from early losses attributed to declines in crude oil futures, traders said.

 

December oil share ended at 41.90% and the November/October crush ended at 65 1/4 cents.

 

In soymeal trades, buyers were light scattered among various commission houses. JP Morgan sold 1,800 December with ABN Amro a seller of 300 December and Fimat was a seller of 300 March. Speculative fund selling was estimated between 1,000 and 2,000 lots.

 

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