October 17, 2006

 

CBOT Soy Review on Monday: Mostly Lower; Consolidates Prior Gains

 

 

Chicago Board of Trade soybean futures ended mostly lower Monday, consolidating prior gains in choppy, two-sided action.

 

November soybeans finished 2 1/2 cents lower at US$5.89. December soymeal settled US$1.20 lower at US$178.50 per short tonne, while December soyoil ended unchanged at 24.93 cents a pound.

 

The absence of fresh news to trade off kept futures spinning their wheels for most of the day, as speculative funds did not throw anything at the market to significantly push futures in either direction, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The market set back in a consolidative corrective manner, with the most-active November future trading an inside day on technical charts. However, solid underlying demand, with a strong weekly export inspection figure and supportive monthly crush figure, provided strength to keep a floor beneath the market, Hannagan added.

 

Otherwise, futures experienced technical trade, with talk of recent gains being a bit overbought capping upside movement. Traders remain on guard for seasonal harvest pressures to surface, but current demand is more than enough to offset hedge-related selling, Hannagan said.

 

U.S. Department of Agriculture reported 38.628 million bushels of soybeans were inspected for export in the week ended Oct. 12. The export figure is up 47.6% from the previous week's 26.169 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 22 million to 45 million bushels.

 

The National Oilseed Processors Association said its members crushed 137.3 million bushels of soybeans during September. The figure was above the average trade estimate of 133 million bushels and above the 134.7 million NOPA reported for the month of August.

 

In pit trades, Calyon Financial bought 1,000 November, Fortis bought 600 January and Term Commodities bought 400 January.

 

On the sell side, sellers were widely scattered among various commission houses. Calyon Financial and RJ O'Brien each sold 500 November and Iowa Grain sold 400 November, with ADM Investor Services and UBS Securities each selling 300 November. Speculative funds were light net sellers on the day.

 

Day session volume for soybeans on the e-CBOT platform totaled 30,095 contracts.

 

South American soybean futures ended higher, with the November futures settling 15 cents higher at US$6.70.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, in choppy, two-sided trade. Soymeal futures ended on the defensive, setting back after setting three-month highs earlier in the session. Solid underlying demand remained a supportive feature to lift prices, but once buying interest was exhausted, futures retreated to negative territory, analysts say. However, bullish traders were encouraged by the December future's ability to hold and settle above the contract's 200-day moving average.

 

Soyoil futures settled near steady levels Monday, struggling to find lasting direction in choppy trade. Weakness in crude oil applied pressure with a retreat in soymeal prices generating support on spreads, analysts said. Light support was also garnered from a lower-than-expected soyoil stocks figure in the NOPA crush report at 2.630 billion pounds.

 

January oil share ended at 41.40% and the November/December crush ended at 78 cents.

 

In soymeal trades, Fimat bought 1,500 December, Bunge Chicago bought 500 December, and Man Financial bought 300 December. JP Morgan sold 1,400 December, Bunge Chicago and Tenco each sold 300 December.

 

In soyoil trades, Tenco bought 1,200 December and Bunge Chicago bought 400 December. Sellers were scattered among various commission houses.