November 3, 2005

 

CBOT Soy Review on Wednesday: Lower; quietly consolidates recent gains

 

 

Soybean futures on the Chicago Board of Trade ended modestly lower Wednesday, quietly consolidating Tuesday's gains amid the absence of market-moving news to generate fresh momentum.

 

November soybeans ended 1 cent lower at US$5.73 1/2, January soybeans finished 1 1/2 cent lower at US$5.85, December soymeal settled US$0.40 higher at US$173.90 a short tonne, while December soyoil ended 19 points lower at 22.84 cent a pound.

 

Futures are stuck in a trading range, with participants accepting big crop production estimates while the uncertainty of South American production and firming cash basis levels provide support to promote sideways trade, analysts said.

 

Active contracts traded inside days on technical charts, attempting to gain a footing ahead of next week's crop production report. Analysts said the one thing that concerns traders is how will larger crops translate into carryover projections with export demand off to a slower-than-expected start to the marketing year.

 

Otherwise, activity was relatively slow, with futures having trouble generating momentum in either direction. The inability of futures to challenge support and resistance levels during the session let the air out of the market as well, traders added.

 

The U.S. Department of Agriculture is scheduled to issue its weekly export sales report at 7:30 a.m. CST Thursday. Analysts look for commitments in a range of 550,000 tonnes to 850,000 tonnes for soybeans; 100,000 to 200,000 tonnes for soymeal; and 3,000 to 9,000 tonnes for soyoil.

 

In pit trades, ADM Investor Services, Citigroup and Fimat each bought 500 January. RJ O'Brien sold 800 January, Calyon Financial sold 500 January and Refco sold 300 January. Commodity fund selling was estimated at 1,500 contracts.

 

South American soybean futures ended lower. The November futures settled 2 cents lower at US$6.40.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed. Soymeal managed to hold firm through most of the day as the products continued to correct from a counter seasonal rally in oil share. The unraveling of soyoil/soymeal spreads was a featured attraction in otherwise quiet action, with good underlying domestic soymeal demand a supportive factor as well, floor sources said.

 

December oil share dropped to 39.64%, and the November/December crush was at 60 1/4 cents.

 

In soymeal trades, Bunge Chicago bought 300 December, with Calyon Financial and Fimat featured buyers. RJ O'Brien sold 300 December, and Cargill and Prudential Financial each sold 200 December.

 

In soyoil trades, Bunge Chicago bought 700 December, ADM Investor Services bought 200 January, Fimat bought 600 December, and Cargill, Refco Investor Services, Citigroup and Rosenthal each bought 200 December. Calyon Financial sold 400 December, Tenco sold 400 January, and Bunge Chicago, ABN Amro and Prudential Financial each sold 200 December.