November 4, 2006

 

CBOT Soy Review on Friday: Settles higher on local, speculative buying

 

 

Chicago Board of Trade soybean futures ended Friday's session posting modest gains, underpinned by local and speculative buying as selling pressure remained muted.

 

November soybeans finished 3/4-cent higher at US$6.49, and January soybeans ended 1 1/2-cent higher at US$6.62 3/4. December soymeal settled US$0.20 higher at US$195.50 per short tonne, while December soyoil ended 18 points higher at 27.68 cents a pound.

 

The market managed to carve out light gains, finding price support after early profit taking pressure failed to attract any significant selling interest, analysts said.

 

Overall activity was relatively subdued, with speculative buying re-emerging on the early price break. That theme was consistent for most of the day, as traders continue to show an unwillingness to press prices with speculative buyers continuing to surface on any setback in prices, analysts added.

 

Bullish technical momentum continues to feed into the supportive tonnee in the market, with perceptions that soybeans remain underpriced in relation to corn and needs to fight for South American and 2007 U.S. acres keeping sellers on the run, analysts said.

 

The new crop 2007 November future settled 3 cents higher at US$6.97 after climbing above the US$7.00 level during the session.

 

Nevertheless, futures ended well off mid session highs, as pre weekend profit taking and hedging surfaced to trim advances, traders added.

 

In pit trades, Calyon Financial and Rand Financial each bought 500 January, with Fimat and Tenco each buyers of 300 January.

 

On the sell side, Iowa Grain sold 500 March, JP Morgan sold 400 January and Citigroup sold 300 January.

 

Day session volume for soybeans on the e-CBOT platform totaled 30,743 contracts.

 

South American soybean futures ended higher, with the November futures settling 2 cents higher at US$7.10.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed with soyoil leading the gains. Soyoil futures ended higher, feeding off support from soybeans and higher crude oil prices, analysts said. The market consolidated within Thursday's wide trading range after early selling pressure was exhausted, traders added.

 

Soymeal futures ended narrowly mixed in consolidative trade. Light profit taking from Thursday's gap higher move on technical charts applied pressure, but the market's inability to fill Thursday's price gap attracted light buying to underpin prices, traders said. Soyoil/soymeal spreading kept a lid on the market's upside potential and led to a light reduction in product share, traders added.

 

December oil share ended at 41.45% and the November/December crush ended at 85 1/2 cents.

 

In soymeal trades, Fortis bought 2,000 December. Fimat and JP Morgan each sold 500 December, with Bunge Chicago selling 400 December.

 

In soyoil trades, Speculative fund buying was estimated near 2,500 contracts. Fimat bought 500 January, Iowa Grain and Fortis each bought 400 December and JP Morgan bought 300 January. Prudential Financial sold 400 December, and UBS Securities sold 300 January.