November 15, 2005

 

CBOT Soy Review on Monday: Lower; corrects friday's gains

 

 

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

 

January soybeans finished 6 1/2 cents lower at US$5.95, December soymeal settled US$1.50 lower at US$180.20 a short tonne, and December soyoil ended 23 points lower at 22.51 centS a pound.

 

Friday's gains were technically oriented and overdone, and without any fresh supportive news to underpin futures, it's tough to sustain prices above the US$6.00 level, said John Kleist of Kleist Ag Consulting.

 

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 drop in soyoil futures adding to the defensive tone filtering through the market, floor sources said. Lingering worries over the spread of bird flu in Asia and its impact on global feed demand, the lack of weather problems in South America as well as a lagging export pace, are seen as factors limiting upside potential.

 

The most-active January future managed to match its November high of US$6.04, but its inability to breach that level took the edge off prices, with ample inventories failing to provide an incentive to aggressively push prices, traders added.

 

Meanwhile, U.S. Department of Agriculture said soybeans inspected for export in the week ended Nov. 10 totaled 20.104 million bushels. Analysts expected soybean inspections in a range of 30 million to 35 million bushels. Accumulated soybean export inspections for the 2005-06 marketing year total 214.093 million bushels, down from last year's 280.548 million at the same time.

 

The National Oilseed Processors Association monthly crush for October was 150.859 million bushels, above the average trade estimate at 149 million. However, the figure was within the range of estimates that span from 147 million to 152.5 million bushels.

 

In pit trades, ADM Investor Services, ABN Amro and Stern each bought 300 January, Fimat bought 500 January and Refco bought 300 March. Rand Financial sold 500 January, and Iowa Grain, Man Financial and RJ O'Brien each sold 200 January.

 

South American soybean futures ended lower. The March futures settled 6 cents lower at US$6.24.

 

 

SOY PRODUCTS

 

Soyoil futures ended lower, falling to 6 1/2-week lows. The market was on the defensive throughout the day, pressured by soyoil stocks data in the NOPA crush report coming in higher than expected and talk of high oil content in the 2005 U.S. soybean crop. Nevertheless, good underlying commercial buying resting beneath prices managed to limit losses.

 

NOPA soyoil stocks were reported at 1.495 billion pounds, well above average trade estimates of 1.374 billion pounds, and soyoil yields were a whopping 11.65 pounds per bushel up from 11.56 in September.

 

Soymeal futures ended the session with moderate declines, giving back a portion of Monday's gains on profit taking. Futures initially rallied to two-month highs, but without fresh fundamental news to inspire buyers, futures easily retreated with the rest of the complex.

 

December oil share ended at 38.45%, and the January crush was at 57 1/2 cents.

 

In soymeal trades, Man Financial bought 400 December, and Citigroup, Prudential Financial and Refco each bought 200 December. Cargill sold 400 December, and Bunge Chicago and Rand Financial each sold 200 December.

 

In soyoil trades, Cargill bought 500 January, Bunge Chicago bought 400 January, ADM Investor Services bought 200 December and 200 January, and Goldenberg Hehmeyer bought 300 March. Fimat sold 300 December and 400 January, RJ O'Brien sold 300 December, and Iowa Grain, ABN Amro and Bunge Chicago each sold 200 December.