November 22, 2006

 

CBOT Soy Review on Tuesday: Settles up on light spec buying

 

 

Chicago Board of Trade soybean futures finished Tuesday's session posting solid gains, propelling to session highs down the stretch on light speculative buying.

 

January soybeans finished 5 1/2 cents higher at US$6.73, and March soybeans ended 6 1/4 cents higher at US$6.86 1/4. December soymeal settled US$0.10 higher at US$192.00 per short tonne, while January soyoil ended 20 points higher at 29.33 cents a pound.

 

The absence of fresh fundamental news kept speculative interest in play, with a late dose of seasonal buying emerging to lift prices in a thinly traded pre-holiday market, analysts said.

 

Overall activity was subdued throughout, as traders were unwilling to take on added risk in the last full trading session ahead of the Thanksgiving holiday, traders said. Nevertheless, futures encountered a late spurt on buying associated with seasonal tendencies for soybeans to advance heading into the Wednesday before Thanksgiving.

 

In the last 30 years, buying the close on Tuesday and selling Wednesday ahead of Thanksgiving has been successful 75% of the time, a CBOT commission house broker said.

 

Tuesday was the last full day session of the week, with CBOT agricultural markets closing at 12 p.m. CST Wednesday and Friday. The markets will be closed Thursday in observance of the Thanksgiving Day holiday.

 

The DTN Meteorlogix weather forecast said in northern Brazil soybean areas, a few scattered showers will develop during the next five days. Temperatures will be a bit cooler than recent hot conditions, but will still trend normal to above normal. Southern Brazil has an improving weather pattern following flooding rains in Rio Grande do Sul during the past weekend. Mainly dry weather will cover this region through Friday. Scattered thundershowers will occur during the weekend. Temperatures will range from normal to above normal.

 

In pit trades, Goldenberg Hehmeyer and DT Trading each bought 300 January, with Rand Financial a buyer of 200 January. Speculative funds were estimated light net buyers on the day. Sellers were scattered among various commission houses.

 

Day session volume on the e-CBOT platform was 16,207 contracts.

 

 

Soy Products

 

CBOT soy product futures ended mostly higher, with soyoil remaining the upside leader of the products. Soyoil finished firm, near session highs, with underlying support from strength in world vegoil markets supporting prices, analysts say. Long-range demand prospects amid expanding biofuel industries are the drivers keeping sellers sidelined, a CBOT floor analyst said.

 

Soymeal futures ended marginally higher, consolidating below technical resistance levels, traders said. Soyoil/soymeal spreading helped limit soymeal gains as well as trim its product share, traders added.

 

December oil share ended at 42.93% and the December/January crush ended at 67 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses.

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with Bunge Chicago a buyer of 400 January and ADM Investor Services a seller of 400 January.