October 28, 2005

 

CBOT Soy Review on Thursday: Mixed; consolidates in tight range

 

 

Soybean futures on the Chicago Board of Trade ended a relatively quiet session narrowly mixed Thursday, hovering in a tight range as the market continued its period of consolidation, traders said.

 

November soybeans ended 1/2 cent lower at US$5.71, January soybeans finished unchanged at US$5.83 1/2, December soymeal settled US$1.20 higher at US$170.50 a short tonne, and December soyoil ended 15 points lower at 23.38 cent a pound.

 

The lack of market-moving inputs that could shift futures out their recent price range has managed to take some enthusiasm from futures, with participants unwilling to aggressively push or pull prices in either direction, analysts said.

 

Export sales and Census crush data at the low end of trade expectations kept a bearish cloud over the market, while uncertainty surrounding South American plantings and seasonal buying trends managed to provide support.

 

Overall activity was relatively light, with traders hesitant to push prices until signs of strong growth in export demand surfaces to buoy prices, particularly with the spread of bird flu in Asia and Europe raising fears of reduced soymeal feed demand, traders said.

 

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

 

U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 842,000 tonnes. Pre-report estimates ranged from 800,000 to 1,000,000 tonnes. The Census Bureau said 133.2 million bushels of soybeans were crushed in September, slightly lower that pre released trade estimates.

 

In soybean pit trades, Tenco bought 300 January, Cargill bought 200 November and 200 January, and FCStone and ABN Amro each bought 200 November. ABN Amro and Citigroup each sold 300 January, Fimat sold 200 January and Man Financial sold 200 November.

 

South American soybean futures ended mixed. The November futures settled unchanged at US$6.37.

 

 

Soy Products

 

Soymeal futures ended higher across the board, supported by a lower-than- expected soymeal stocks figure in the Census crush report. Additional strength was generated from the unwinding of soyoil/soymeal spreads, floor sources said.

 

Meal stocks in the Census report were pegged at 171,600 short tonnes, well below the average trade guess of 284,000 tonnes. Analysts said the stocks figure was representative the ending supply figure for the 2004-05 marketing year, which is well below the USDA's ending stocks projection of 260,000 tonnes.

 

Soyoil futures ended lower, on the defensive for most of the day from spread unwinding, as enthusiasm associated with biodiesel demand has lost some of its impact with energy prices peeling back recently, traders said. Light pressure was also exerted from soyoil stocks in the crush report coming in higher than expected.

 

December oil share fell to 40.68%, and the November/December crush was at 61 1/4 cents.

 

In soymeal trades, Calyon Financial bought 500 December and RJ O'Brien bought 200 December. Refco sold 500 December, Cargill and Fimat each sold 200 December.

 

In soyoil trades, ADM Investor Services, Calyon Financial and Tenco each bought 200 December. Sellers were scattered among various commission houses, with Citigroup and Calyon Financial featured sellers.