November 5, 2005

 

CBOT Soy Review on Friday: Lower; corrects from thursday's surge

 

 

Soybean futures on the Chicago Board of Trade ended lower across the board Friday in a technical correction from Thursday's price surge, traders said.

 

November soybeans ended 11 1/4 cents lower at US$5.80 1/2, January soybeans finished 9 3/4 cents lower at US$5.92, December soymeal settled US$2.10 lower at US$176.20 a short tonne, and December soyoil ended 59 points lower at 22.94 cents a pound.

 

Thursday's gains were overdone, and without any fresh supportive news to underpin prices, speculative selling emerged as the legs of the market become shaky, said a CBOT commission house broker.

 

The inability of futures to find willing buyers to hold prices above the psychological US$6.00-per-bushel level basis January futures opened the door for the setback, with speculative and local buyers running for cover.

 

The theme was consistent over the course of the day, with a sharp retracement in soyoil futures adding to the defensive tonnee filtering through the market, floor sources said.

 

Lagging export demand, abundant nearby supplies and outlooks for the U.S. Department of Agriculture to report larger production and carryout projections next week remained a bearish influence to limit upside potential.

 

Meanwhile, futures managed to find support near their 50-day moving averages as buyers found a level that they were willing to defend positions and keep a floor under the market heading into the weekend, traders added.

 

In pit trades, Calyon Financial bought 1,000 January, Citigroup bought 400 January and Refco bought 300 March.

 

Fimat sold 700 January, ABN Amro, O'Connor and Rand Financial each sold 500 January, and Goldenberg Hehmeyer, RJ O'Brien and Refco each sold 300 January. Commodity fund selling was estimated at 3,000 contracts.

 

South American soybean futures ended lower. The November futures settled 12 cents lower at US$6.44.

 

 

Soy Products

 

Soymeal futures ended the session with moderate declines, giving back a portion of Thursday's gains on end of the week profit taking. Futures satisfied near-term upside objectives Thursday, but without fresh fundamental news to inspire buyers, futures easily retreated with the rest of the complex.

 

Soyoil futures ended sharply lower, stumbling below key support levels in a technical setback from Thursday's gains. Weakness in the energy sector added to the losses, with the continued correction of the soyoil/soymeal spread pressuring prices as well. Nevertheless, the most-active December future traded an inside day on technical chart, a sign of sideways price action, traders said.

 

December oil share fell to 39.43%, and the November/December crush was at 59 1/2 cents.

 

In soymeal trades, Cargill and Refco each bought 300 December. Goldenberg Hehmeyer sold 500 December, Rand Financial sold 300 December, and Bunge Chicago, Calyon Financial, Refco Investor Services and Man Financial each sold 200 December.

 

In soyoil trades, Goldenberg Hehmeyer bought 500 December, and Man Financial bought 1,000 December. Calyon Financial sold 700 December, RJ O'Brien sold 600 December, Fimat and Man Financial each sold 500 December, Citigroup sold 400 December and Refco sold 300 December. Commodity fund selling was estimated at 2,500 contracts.