October 26, 2005

 

CBOT Soy Review on Tuesday: Ends up; maintains strength throughout

 

 

Soybean futures on the Chicago Board of Trade ended Tuesday's session moderately higher, maintaining a supportive theme throughout amid technical buying and spillover momentum from rallying energy and metals markets, traders said.

 

November soybeans ended 3 cents higher at US$5.78, January soybeans finished 2 3/4 cents higher at US$5.90 1/4, December soymeal settled US$1.00 higher at US$170.90 a short tonne, while December soyoil ended 8 points higher at 23.78 cent a pound.

 

The lack of fresh fundamental inputs kept technicals in the forefront Tuesday, with support from the energy and metals markets helping underpin futures, as bearish fundamentals are effectively dialed into prices, said Mike Zuzolo, chief analyst with Risk Management Commodities Inc. in Lafayette, Ind.

 

Carryover technical strength following Monday's price bounce and light price relief from the fall harvest winding down set the stage for price gains. However, upside potential remained limited as market bulls failed to get excited amid the mixed actions in the products, added Zuzolo.

 

Contrary to the market wanting to be strong Tuesday, futures were seemingly marking time hovering in a sideways pattern, as storage concerns and the lack of clarification on plantings in South America continued to keep futures entrenched within its recent trading range, said Bill Nelson, associate vice president A.G. Edwards and Sons in St. Louis.

 

Otherwise, activity was relatively quiet, with the rolling of positions and outright liquidation of November contracts ahead of first notice day Oct. 31 featured attractions.

 

In pit trades, ABN Amro bought 600 January, Rand Financial bought 400 January, with Refco, Cargill, FCStone, Citigroup, Fimat, Tenco and Man Financial featured buyers as well. RJ O'Brien was the primary seller on the day. Commodity fund buying was estimated at 1,500 contracts.

 

In spreads, Fimat spread 2,500 November/January.

 

South American soybean futures ended higher across the board. The November futures settled 3 1/2 cents higher at US$6.42.

 

 

SOY PRODUCTS

 

Soymeal futures ended modestly higher, regaining some product share amid the unwinding of soyoil/soymeal spreads, analysts said.

 

Soyoil futures ended mixed after a two-sided session, with futures losing some ground to soymeal as participants took some profits on winning soyoil/soymeal spreads. The market garnered initial support from rising energy prices, but once the market failed to attract follow through buying at session highs, selling pressure surfaced. This continued, until commercial buying beneath the market and technical support managed to underpin prices down the stretch.

 

December oil share ended at 40.83%, and the November/December crush was at 59 1/2 cents.

 

In soymeal trades, Buying and selling was scattered among various commission houses, with commodity funds net buyers on the day.

 

In soyoil trades, Bunge Chicago bought 400 December, Term Commodities, Tenco and Citigroup each bought 300 December, ABN Amro, Prudential Financial, Refco and ADM Investor Services each bought 200 December. Bunge Chicago sold 300 December, Citigroup sold 400 December, and Iowa Grain sold 200 December. Commercial buying was estimated at 1,600 lots.