November 22, 2005

 

CBOT Soy Review on Monday: Up; recovers from last week's declines

 

 

Soybean futures on the Chicago Board of Trade ended Monday's session posting modest gains, bouncing back from last week's declines, on speculative buying.

 

January soybeans finished 2 1/2 cents higher at USUS$5.72 1/4; December soymeal settled USUS$1.70 higher at USUS$173.90 a short tonne; and December soyoil ended 8 points lower at 21.93 cent a pound.

 

The absence of the aggressive speculative selling seen last week, seasonal buying trends and news Asian rust had moved as far north as Kentucky provided psychological support to underpin prices, analysts said.

 

Spillover strength from a supportive tonnee in soymeal coupled with firm cash prices and decent weekly export inspections provided fundamental support to aid the higher price action, traders said.

 

However, bearish underlying fundamentals, with bird flu worries in Asia and favorable crop conditions in South America remained a hindrance to upside potential. Otherwise, overall activity was relatively light, with the bulk of the session's volume absorbed in the first hour of trading.

 

Meanwhile, U.S. Department of Agriculture said soybeans inspected for export in the week ended Nov. 17 totaled 34.168 million bushels. Analysts expected soybean inspections in a range of 32 million to 37 million bushels. Accumulated soybean export inspections for the 2005-06 marketing year total 256.702 million bushels, down from last year's 329.354 million at the same time.

 

The DTN Meteorlogix forecast calls for continued episodes of showers and thunderstorms in Mato Grosso, while Parana has renewed precipitation of up to 1 1/2 inches. This weather pattern means that all of Brazil's soybean belt will have some appreciable rain by the end of November except for Rio Grande do Sul, which had very wet weather to begin this growing season.

 

In Argentina, a nearly ideal weather combination is seen for the corn and soybean crops. This week is forecast to bring more showers and thunderstorms, with temperatures turning cooler later this week, but not abnormally cold, Meteorlogix added.

 

In pit trades, Calyon Financial and Goldenberg Hehmeyer each bought 500 January, and Fimat, RJ O'Brien and Rand Financial were featured buyers as well. Citigroup sold 500 January, and ADM Investor Services, Refco Investor Services, and RJ O'Brien each sold 300 January. Commodity fund buying was estimated at 1,000 lots.

 

South American soybean futures ended higher. The March futures settled 2 cents higher at USUS$6.05.

 

 

SOY PRODUCTS

 

Soymeal futures ended higher across the board, staging a modest recovery from last week's price slide. Commercial buying led the upward assault, with speculative buying coming on board, traders said.

 

Soyoil futures ended modestly lower, retreating from initial gains. The lack of supportive news to sustain upside price movement, with growing soyoil stocks and strong yields bearish features that attracted speculative selling. Futures lost product share to soymeal, as spreading between the products weighed on soyoil as well, traders added.

 

December oil share ended at 38.67%, and the December/January crush was at 51 1/2 cents.

 

In soymeal trades, Bunge Chicago bought 300 December; Fimat bought 500 January 800 March and 200 July; and Calyon Financial bought 300 December. ADM Investor Services, Bunge Chicago and Cargill each sold 300 December. Fund buying was pegged at 1,700 contracts.

 

In soyoil trades, Bunge Chicago bought 400 January; Citigroup bought 700 December; and Tenco bought 300 January. ADM Investor Services sold 400 January; Cargill sold 300 March; Calyon Financial sold 600 January; and Fimat sold 400 December and 1,100 January. Speculative fund selling was pegged at 2,000 lots.