November 7, 2006

 

CBOT Soy Review on Monday: Near steady; consolidative, 2-sided trade

 

 

Chicago Board of Trade soybean futures ended steady to modestly higher Monday, chopping around in consolidative trade amid the absence of fresh market moving features.

 

November soybeans finished 1/4 cent higher at US$6.49 1/4, and January soybeans ended unchanged at US$6.62 3/4. December soymeal settled US$1.00 higher at US$196.50 per short tonne, while December soyoil ended 14 points lower at 27.54 cents a pound.

 

A quiet news front promoted a sideways theme, with light support from neighboring grain futures providing strength while bearish fundamentals kept buying limited in the absence of a significant speculative presence, analysts said.

 

Position squaring ahead of Thursday's crop reports added to the consolidative tonnee, with a lower-than-expected export inspections figure and circulating deliveries failing to provide any fundamental support to attract fresh buying, traders added.

 

General perceptions that soybean prices need to remain firm in relation to corn amid outlooks for U.S. corn acres to expand at the expense of soybean acres in 2007 as well as attract increased plantings in Brazil are underpinning features for the market, analysts added.

 

Meanwhile, analysts say despite expectations for higher production and carryout estimates from the U.S. Department of Agriculture Thursday, traders remain leery of selling into the market amid the willingness of speculative funds to buy market weakness.

 

The average of analysts' estimates taken from a survey compiled by Dow Jones Newswires for 2006-07 U.S. soybean production based on conditions as of Nov. 1 pegs the crop at 3.240 billion bushels. The estimates ranged from 3.193 billion bushels to 3.316 billion bushels. The average of estimates pegged 2006-07 ending stocks at 583 million bushels. The estimates ranged from 520 million to 635 million bushels.

 

After the close, at 3 p.m. CST, USDA is scheduled to release its weekly crop progress report. Analysts surveyed by Dow Jones anticipate the harvest pace between 88% and 91% complete.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses, with RJ O'Brien a featured buyer of 300 January and JP Morgan a key seller of 300 November.

 

Day session volume for soybeans on the e-CBOT platform totaled 21,027 contracts.

 

South American soybean futures ended steady, with the November future settling unchanged at US$7.10.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with both soymeal and soyoil experiencing two-sided price action. Soymeal futures ended higher, managing to rebound from earlier weakness on spreading between the products. The market continues to show corrective features following last week's spike to multi-month highs, a CBOT commission house broker said.

 

Soyoil ended lower across the board, consolidating in a choppy, two-sided session. Position squaring was a featured attraction in the absence of fresh news to spur activity, traders said.

 

December oil share ended at 41.20% and the November/December crush ended at 86 cents.

 

In soymeal and soyoil trades, buyers and sellers were scattered among various commission houses.