October 12, 2006

 

CBOT Soy Review on Wednesday: Up; wheat supports,squaring ahead of USDA

 

 

Chicago Board of Trade soybean futures ended modestly higher Wednesday, feeding off the volatile gains in wheat futures, with underlying concerns over harvest slowdowns in the eastern Midwest generating support.

 

November soybeans finished 1 3/4 cents higher at US$5.62 1/4. December soymeal settled US$0.40 higher at US$167.20 per short tonne, while December soyoil ended 3 points lower at 24.50 cents a pound.

 

The market was underpinned by speculative buying, but futures remained range bound over the course of the day, as futures continued to consolidate ahead of Thursday's crop reports, analysts said.

 

The buoyancy of wheat remains a strong influence on prices, but with soybean's bearish supply side fundamentals, its hard to drum up bullish momentum with a record crop poised to enter pipeline over the next few weeks, traders added.

 

Traders are said to be gearing up for Thursday's crop report from the U.S. Department of Agriculture, where analysts anticipate record production projections. The squaring of positions managed to trim advances down the stretch, as traders reduced risk potential heading into the crop reports.

 

The average of analysts estimates taken from a survey compiled by Dow Jones Newswires for 2006-07 U.S. soybean production based on conditions as of Oct. 1 pegs the crop at 3.213 billion bushels. The estimates ranged from 3.155 billion bushels to 3.326 billion bushels. The average of estimates pegged 2006-07 ending stocks at 588 million bushels. The estimates ranged from 521 million to 671 million bushels.

 

Meanwhile, the DTN Meteorlogix forecast calls for light to moderate rainfall of up to one-half inch in the eastern Midwest during the next 24 to 48 hours. A few days of dry weather will then be followed by another round of showers during Monday and Tuesday, with up to one inch of rain in the eastern Midwest. This periodic shower pattern will cause delays in the harvest progress of soybeans, Meteorlogix reports.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.

 

Day session volume for soybeans on the e-CBOT platform totaled 33,662 contracts.

 

South American soybean futures ended lower, with the November futures settling 2 cents lower at US$6.33.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, following the supportive tonnee in soybeans. Soyoil futures traded higher for most of the day, with nearby contracts finally succumbing to late profit taking and position squaring pressure down the stretch. Spillover support from soybeans and the supportive tonnee filtering through the ag complex provided upward momentum, while weakness in crude oil futures helped attract late selling pressure, traders added.

 

Soymeal futures held a steady, higher course during the day, supported by strength from soybeans, analysts said.

 

December oil share ended at 42.29% and the November/December crush ended at 75 cents.

 

In soymeal trades, Man Financial and RJ O'Brien were active buyers with Fimat and JP Morgan key sellers. Speculative funds were net buyers on the day.

 

In soyoil trades, buying and selling was widely scattered among commission and commercial houses, with speculative funds estimated buyers on the day.