October 27, 2005

 

CBOT Soy Review on Wednesday: Stumbles lower; lacks supportive inputs

 

 

Soybean futures on the Chicago Board of Trade ended Wednesday's session on a down note, falling to session lows on the close, as the market lacked supportive inputs to pull buyers off the sidelines, traders said.

 

November soybeans ended 6 1/2 cents lower at US$5.71 1/2, January soybeans finished 6 3/4 cents lower at US$5.83 1/2, December soymeal settled US$1.60 lower at US$169.30 a short tonne, and December soyoil ended 25 points lower at 23.53 cents a pound.

 

General ideas that recent rallies were more technical than fundamentally based, concerns that exports are not keeping pace with current government projections and forecasts for large deliveries against November futures weighed on prices, said Dan Basse, president AgResource in Chicago.

 

The lower theme was consistent from the outset, with light speculative selling pinning prices in negative territory. Lingering concerns over the spread of bird flu in Asia and Europe and what impact it will have of soymeal demand cast a defensive cloud over the market as well.

 

This was consistent throughout the day, with local and speculative selling featured attractions. Rumors of China buying Argentine soybeans and the absence of European buying in weekly export reports added to the bearish sentiment in the trading pit.

 

However, concerns that South American soybean planting maybe hampered by weather-related problems provided mild support to limit losses and keep futures confined within their recent trading ranges.

 

Otherwise, the rolling of spreads and the liquidation of November positions ahead of first notice day Oct. 31 were featured attractions.

 

On tap for Thursday, the Census crush report is scheduled for release at 7 a.m. CDT. Analysts surveyed by Dow Jones Newswires anticipate the U.S. soybean crush for September to be 133.7 million bushels, up from the August figure of 130.3 million bushels because of good crush margins and the availability of supplies during September, analysts said in a survey.

 

U.S. Department of Agriculture is scheduled to issue its weekly export sales report 7:30 a.m. CDT Thursday. Analysts look for commitments in a range of 800,000 tonnes to 1,000,000 tonnes for soybeans, 100,000 to 150,000 tonnes for soymeal and 2,000 to 10,000 tonnes for soyoil.

 

In pit trades, ADM Investor Services and Fimat each bought 300 January, and Tenco bought 500 January. Calyon Financial sold 300 November and 400 January, Citigroup sold 500 January, and UBS securities sold 600 January. Commodity fund selling was estimated at 2,000 lots.

 

South American soybean futures ended lower. The November futures settled 5 cents lower at US$6.37.

 

 

Soy Products

 

Soymeal futures ended lower across the board, pressured by speculative selling, with concerns over the potential for lost export demand related to the spread of bird flu and Asia and Europe holding buyers at bay.

 

Soyoil futures stumbled lower Wednesday, pressured by weakness in the energy sector, technical selling and the consolidation of previous gains tied to supportive biodiesel outlooks.

 

December oil share ended at 41.00%, and the November/December crush was at 59 3/4 cents.

 

In soymeal trades, Buying and selling was scattered among various commission houses, with Citigroup a seller of 600 December. Commodity funds were estimated as net sellers on the day.

 

In soyoil trades, Bunge Chicago bought 400 December, Cargill bought 300 December, and Goldenberg Hehmeyer bought 400 December. Citigroup sold 300 December, Rand Financial sold 300 December and 300 January, Tenco sold 400 December and 200 January, with Fimat, Bunge Chicago and Man Financial featured sellers as well.