October 29, 2005

 

CBOT Soy Review on Friday: Ends near 2-week low; lacks fresh support

 

 

Soybean futures on the Chicago Board of Trade ended moderately lower Friday, sagging to nearly two-week lows, as the absence of fresh supportive news and technical selling weighed on prices, traders said.

 

November soybeans ended 6 cents lower at US$5.65, January soybeans finished 6 cents lower at US$5.77 1/2, December soymeal settled US$1.70 lower at US$168.80 a short tonne, while December soyoil ended 5 points lower at 23.33 cent a pound.

 

The lack of buy orders in the market, and the ability of futures to penetrate recent lows set the stage for the losses, said a CBOT commission house broker.

 

The defensive theme was consistent from the outset, with futures quietly grinding to pre-Oct. crop report levels. The ability of nearby contracts to settle below an upside gap on technical charts filled earlier this week cast a bearish cloud over the market, traders said.

 

Abundant nearby inventories, logistic problems on the river system, tight storage pace, lagging export demand and favorable planting conditions in South America were seen as the fundamental variables that buoyed the declines.

 

Decent spread trade, as participants rolled and liquidated nearby positions ahead of first notice day Monday was a featured attraction as well, with the ability of November and January futures to slip through support at US$5.66 1/2 and US$5.78 respectively triggered pre-placed sell orders that cemented prices in negative territory, floor sources said.

 

Meanwhile, analysts expect deliveries against the CBOT November soybean contract to fall in a range of 500 to 1,500 lots, with most analysts leaning toward a range of 600 to 1,000 lots. First notice day for November futures is Monday.

 

In pit trades, Bunge Chicago and Fimat each bought 300 January, Cargill, ABN Amro and Man Financial each bought 200 January.

 

On the sell side, Refco and UBS Securities each sold 800 January, Rand Financial sold 600 January, ABN Amro and Man Financial each sold 500 January, and Citigroup sold 400 January. Commodity fund selling was estimated at 4,500 contracts.

 

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

 

 

SOY PRODUCTS

 

Soymeal futures stumbled lower in unison with soybeans, with speculative sales and lingering concerns over feed demand issues related to the spread of bird flu in Asia and Europe applying pressure.

 

Soyoil futures ended modestly lower in tune with the defensive tone filtering through the complex. Recent declines in the energy sector have taken the edge off the market in relation to bullish biodiesel outlooks, as the market settles into a range, traders said.

 

Nevertheless, soyoil managed to regain some product share as good underlying commercial buying and late local position evening enabled futures to rebound against soymeal down the stretch.

 

December oil share ended at 40.87%, and the November/December crush was at 63 cents.

 

In soymeal trades, ADM Investor Services, Fimat and Refco each bought 300 January, Calyon Financial and O'Connor each sold O'Connor 300 December. Commodity fund selling was estimated at 1,000 lots.

 

In soyoil trades, Bunge Chicago bought 60 December, Cargill bought 300 December, Term Commodities bought 200 December, Citigroup bought 600 December, Fimat, Calyon Financial, and Prudential Financial each bought 300 December. Bunge Chicago and Man Financial each sold 300 December, Rand Financial sold 600 December and UBS securities sold 400 January.