October 25, 2007

 

CBOT Soy Review on Wednesday: Drift lower after choppy, two-sided day

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, retracing Tuesday's advances after chopping around on both sides of unchanged levels amid the absence of fresh fundamental news.

 

November soybeans settled 5 1/2 cents lower at US$9.76 1/4 and January soybeans ended 5 1/2 cents lower at US$9.93 3/4. December soymeal settled US$2.60 lower at US$274.00. December soyoil finished 6 points higher at 40.48.

 

The market really had nothing going on fundamentally, but borrowed strength from crude oil provided support while favorable weather for harvesting in the U.S. and planting in Brazil applied pressure, said Jack Scoville, analyst with Price Futures Group in Chicago.

 

The market jockeyed back and forth over the course of the day, struggling to generate lasting momentum amid the absence of fresh news to provide definitive direction, analysts said.

 

Mixed signals from outside inflationary markets kept the choppy theme in play, with limit down wheat futures providing added weakness to temper aggressive buying interest, analysts added.

 

Overall activity was subdued, with traders anticipating the market will continue its sideways pattern, holding in an 11-day trading range until fresh fundamental impacts provide a clear path for futures, traders said.

 

The DTN Meteorlogix forecast said the last half of the week features a continued favorable harvest weather trend in the DTN Meteorlogix forecast. The only rainfall will be very light showers in eastern Iowa and eastern Minnesota on Friday. The drier weather favors late crop harvest.

 

Through Saturday, Nov. 3, the outlook in the central U.S. has mostly above-normal temperatures and below-normal rainfall. Harvest will make brisk progress into the final stages for row crops, Meteorlogix said.

 

In Brazil's soybean areas, widespread rainfall is headed for Mato Grosso, Mato Grosso do Sul and southern Goias. This rainfall will improve soil moisture for early soybeans. The new soybean areas of western Bahia, Brazil, look to continue drier and much warmer than normal during the next week or more, Meteorlogix forecasts.

 

The U.S. Department of Agriculture is scheduled to release weekly export sales figures for the week ended Oct. 18 at 8:30 a.m. EDT Thursday. Trade estimates put soybean export sales at 400,000 to 850,000 metric tonnes. Soymeal sales are projected in a range of 75,000 to 175,000 metric tonnes, with soyoil sales expected in a range from 20,000 to 30,000 tonnes.

 

The Census Bureau is scheduled to release its September soybean crush report Thursday at 8 a.m. EDT, (1200 GMT). U.S. soybean crush for September is expected to be 147.5 million bushels in the U.S. Census Bureau's monthly report, up from the August crush figure of 146.2 million bushels. August soymeal stocks are seen increasing to 325,000 short tonnes, up from the 234,700 tonnes reported for August. Soyoil stocks are seen decreasing to 2.873 billion pounds in the report, down from 3.038 billion the previous month.

 

In pit trades, ADM Investor Services bought 300 January, Fimat bought 500 January, and RJ O'Brien bought 200 January. Sellers were scattered among various commission houses. Speculative funds were estimated sellers between 1,000 and 2,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed once again, with soyoil continuing to garner support from higher crude oil futures. Two-sided trade was seen in both of the products, but soyoil remained underpinned by bullish longer range demand prospects tied to biodiesel, with rising crude oil prices increasing interest in biofuels, analysts said. Soymeal futures followed the lead of soybeans, testing both sides of unchanged, with oil/meal spreading applying pressure to limit upside potential, analysts added.

 

December oil share ended at 42.49% and the November/December crush ended at 71 3/4 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 1,500 lots.

 

In soyoil trades, ADM Investor Services, JP Morgan and Iowa Grain each bought 300 December. JP Morgan sold 300 January. Speculative fund buying was estimated at 1,000 lots.