November 16, 2005

 

CBOT Soy Review on Tuesday: Carves out declines in two-sided action

 

 

Soybean futures on the Chicago Board of Trade ended lower Tuesday, carving out modest declines after chopping around in a two-sided affair.

 

January soybeans finished 2 3/4 cents lower at US$5.92 1/4, December soymeal settled unchanged at US$180.20 a short tonne, and December soyoil ended 17 points lower at 22.34 cent a pound.

 

Futures effectively consolidated within its recent trading range, as the absence of fresh fundamental news failed to provide an incentive for participants to push futures out of their sideways trading pattern, analysts said.

 

The active January future continued its retracement of Friday's price bounce, with the inability of futures to find willing buyers above the key US$6.00-per-bushel level attracting speculative and local selling. A thinly traded market helped produce the two-sided session, as it did not take much order size to push and pull prices in either direction, said a CBOT commission house broker.

 

Nevertheless, weak market fundamentals with large available supplies, a lagging export pace, bird flu concerns and favorable planting conditions in South America have managed to keep a bearish cloud hovering above the market.

 

Tight farmer holding of new crop supplies have managed to firm cash basis levels and with daily rumors of Chinese buying interest, downside momentum remains limited as well.

 

Meanwhile, DTN Meteorlogix said Brazil's largest soybean-producing state, Mato Grosso, has a very good chance for widespread showers and thunderstorms by the end of this week into this coming weekend. Farther to the south, southern Brazil states of Rio Grande do Sul and Parana have drier weather in store, which will benefit planting progress. In Argentina, beneficial rainfall of up to one inch in the main corn and soybean belt of Argentina are expected, Meteorlogix added.

 

In pit trades, Citigroup, RJ O'Brien, and DT Trading each bought 300 January, and ADM Investor Services, Prudential Financial, Rand Financial and Refco bought 200 January. UBS Securities sold 600 January, Fimat sold 300 January, and Cargill and Citigroup each sold 200 January.

 

South American soybean futures ended near unchanged. The March futures settled steady at US$6.24.

 

 

SOY PRODUCTS

 

Soymeal futures finished modestly higher, after a choppy two-sided session. The market traded inside days on technical charts, as futures consolidated in a range, with good underlying domestic demand keeping a floor beneath prices, analysts said.

 

Soyoil futures ended moderately lower Tuesday, setting new lows for the current move, while sliding to seven week lows. Larger-than-expected U.S. inventories and higher-than-anticipated oil content in the 2005 U.S. soybean crop served as the fundamental catalyst to extend the market's correction in oil share percentage, traders said.

 

December oil share ended at 38.27%, and the December/January crush was at 50 cents.

 

In soymeal trades, RJ O'Brien and Rand Financial each bought 200 December, with Fimat, Man Financial, O'Connor and Refco light buyers on the day. Cargill sold 500 January, Fimat sold 300 December, and Goldenberg Hehmeyer sold 200 December.

 

In soyoil trades, Bunge Chicago, Fimat and Goldenberg Hehmeyer each bought 300 January, and Citigroup bought 200 May. O'Connor sold 500 December, Calyon Financial sold 200 December, and Man Financial and Prudential Financial each sold 200 January, with ADM Investor Services, Bunge Chicago, Citigroup, Iowa Grain and Rand Financial featured sellers as well.