November 8, 2005

 

CBOT Soy Review on Monday: Ends down; tech sales, lack of support

 

 

Soybean futures on the Chicago Board of Trade ended lower Monday, pressured by technically inspired speculative sales amid the absence of fresh supportive inputs, analysts said.

 

November soybeans ended 9 cents lower at US$5.71 1/2, January soybeans finished 9 cents lower at US$5.83, December soymeal settled US$2.10 lower at US$174.10 a short tonne, and December soyoil ended 27 points lower at 22.67 cents a pound.

 

The market took on a defensive stance from the outset, with carryover weakness from Friday's weak technical close spilling over to press futures into negative territory, said a CBOT commission house broker.

 

The ability of nearby contracts to gap and hold below meaningful chart support at their 50-day moving averages served as the catalysts to keep buyers sidelined.

 

Bearish underlying fundamentals, with large production outlooks, increased ending stock projections, lagging export demand and favorable planting conditions in South America failed to provide an incentive for buyers to step in front of the downward movement, traders added.

 

Nevertheless, futures remain within the market's recent trading range, with analysts expecting the sideways trend to continue as the market gears up for Thursday's crop report.

 

The average of trade estimates from a survey of industry analysts by Dow Jones Newswires peg 2005 production at 3.016 billion bushels, up from the U.S. Department of Agriculture's October projection of 2.967 billion.

 

Meanwhile, USDA said soybeans inspected for export in the week ended Nov. 3 totaled 33.088 million bushels. The export figure was down from last week's 41.420 million and below the 36.446 million inspected at the same time last year. Analysts expected soybean inspections in a range of 37 million to 45 million bushels. Accumulated soybean export inspections for the 2005-06 marketing year total 190.076 million bushels, down from last year's 234.842 million at the same time.

 

In pit trades, Rand Financial and DT Trading each bought 400 January. FCStone and Fiat each sold 300 January, Man Financial sold 400 January, and ABN Amro, Calyon Financial, Citigroup and Rand Financial each sold 500 January. Commodity fund selling was estimated at 2,000 contracts.

 

South American soybean futures ended lower. The November futures settled 9 cents lower at US$6.35.

 

 

SOY PRODUCTS

 

Soymeal futures ended lower across the board, moving in unison with declines in soybeans. Technical weakness associated with the December futures'ability to penetrate support at its 50-day moving average and lingering concerns over the spread of bird flu in Asia and Europe added weight to the market, traders said.

 

Soyoil futures stumbled lower, in step with the declines in the rest of the complex. Spillover weakness from soybeans, declines in the energy sector and technical selling helped drop nearby futures to their lowest level since Sept. 28.

 

December oil share ended at 39.43%, and the November/December crush was at 61 cents.

 

In soymeal trades, buyers were scattered among various trading firms. Rand Financial sold 500 March while ABN Amro, Refco Investor Services, Prudential Financial and Tenco each sold 200 December.

 

In soyoil trades, Rand Financial bought 500 December, Rosenthal bought 300 December and Fimat bought 300 March. ABN Amro sold 400 December, Tenco sold 300 December, and Citigroup sold 200 December.