November 16, 2006

 

CBOT Soy Review on Wednesday: Lower; exhausted buying attracts selling

 

 

Chicago Board of Trade soybean futures finished a choppy, two-sided session lower Wednesday, peeling back from earlier gains on speculative sales down the stretch.

 

January soybeans finished 7 1/2 cents lower at US$6.63 3/4, and March soybeans ended 8 1/2 cents lower at US$6.76. December soymeal settled US$1.90 lower at US$192.50 per short tonne, while December soyoil ended 27 points lower at 28.39 cents a pound.

 

The market has reached levels that are attractive to producers holding onto large supplies, and with corn unable to launch an attack on its contract highs, traders began to take some profits, said Jack Scoville, an analyst with the Price Futures Group in Chicago.

 

Futures experienced a two-sided session, with prices climbing on perceptions soybeans need to rally with corn in order to secure adequate acreage in 2007, analysts said. Early price strength in soyoil helped maintain bullish market sentiment as well, traders said.

 

However, the inability of corn to sustain its push to higher levels coupled with exhausted buying at session highs uncovered selling pressure to firmly plant prices in negative territory on the close, traders added. Technical pressure was also exerted once the most active January penetrated support at its 10-day moving average of US$6.65 1/2.

 

The market was caught in the middle of corn strength and bearish fundamentals amid the absence of fresh news to drive prices. Market rumblings of lower quality 2006 soybeans possibly dampening export demand for U.S. supplies helped take some of the edge off the market as well, a CBOT floor source said.

 

In pit trades, Man Financial bought 1,000 January, Fimat bought 500 January and 500 March. Calyon Financial, JP Morgan, Fortis and Shatkin/Arbor each bought 300 January.

 

On the sell side, Rand Financial sold 800 January, UBS Securities sold 900 January, Iowa Grain sold 500 January and Term Commodities sold 300 January.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board Wednesday, in unison with soybeans. Soyoil futures ended lower, erasing solid early gains after speculative buying dried up and strength in outside markets eased back, analysts said. The most-active December future rallied to a new contract high following a gap higher opening on technical charts. Bullish long range food for fuel prospects remained underlying features, but without a push from corn and crude oil, profit-taking tempered bullish momentum, traders added.

 

Soymeal futures ended lower as well, keeping pace with late weakness in soybeans.

 

December oil share ended at 42.443% and the December/January crush ended at 72 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with ADM Investor Services a featured buyer of 600 January. In spreads, Fimat spread 1,500 March/December.

 

In soyoil trades, Bunge Chicago and Citigroup each bought 400 January, Calyon Financial bought 300 March and Prudential Financial bought 300 January. JP Morgan sold 300 December, 400 January, and 500 March, and Prudential Financial sold 300 December. In spreads, Fimat spread 1,600 March/December.