November 22, 2007

 

CBOT Soy Review on Wednesday: Backpedals on pre-holiday positioning

 

 

Chicago Board of Trade soybean futures ended lower Wednesday, backpedaling into the Thanksgiving holiday on speculative position squaring amid a lack of fresh support to attract buyers, analysts said.

 

January soybeans settled 3 cents lower at US$10.84 and March soybeans ended 2 1/4 cents lower at US$11.01 1/4. March soy meal settled US$2.60 lower at US$287.40 per short tonne. December soy oil finished 23 points higher at 45.95 cents per pound.

 

The absence of support from outside markets, with crude oil stumbling lower, failed to provide price strength in the absence of any fresh export sales that have buoyed futures in the past two weeks, analysts said.

 

Overall activity was subdued, with many traders heading to the sidelines early, unwilling to take on added risk ahead of the Thanksgiving Day holiday, analysts added. Otherwise, technical activity was featured with futures consolidating inside Tuesday's trading ranges.

 

CBOT grain and oilseed market will be closed Thursday in observance of the Thanksgiving Day holiday.

 

The DTN Meteorlogix weather forecast said Brazil's major soybean areas have generally favorable conditions again in store over the next five days. Drier weather in Rio Grande do Sul and Parana through Friday will improve conditions for planting soybeans. Some rain is expected to return over the weekend. Farther north, generally favorable conditions for planting and developing soybeans are in store for Mato Grosso.

 

On tap for Friday, the USDA is scheduled to release weekly export sales figures for the week ended Nov. 15 at 8:30 a.m. EST. Trade estimates put soybean export sales at 800,000 to 1.2 million metric tonnes. Soy meal sales are projected in a range of 100,000 to 250,000 metric tonnes, with soy oil sales expected in a range from 30,000 to 80,000 tonnes.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 4,000 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soy oil soaring to new contract highs. Soy oil futures charged to new highs, bolstered by bullish underlying demand, analysts said. Soy oil managed to outperform crude oil Wednesday, with supportive news surrounding lower China soy output and year-over-year increases in China's vegetable oil demand serving as fundamental catalysts to keep prices firmly underpinned, said Bill Nelson.

 

Soy meal futures ended lower, backpedaling in unison with soybeans. The market was pressured on spreads with soy oil, with position evening ahead of the Thanksgiving holiday aiding the defensive tonnee, analysts added.

 

December oil share ended at 44.43% and the December/January crush ended at 53 3/4 cents.

 

In soy meal trades, buyers and sellers were scattered among various commission houses. Speculative fund selling was estimated at 1,000 lots.

 

In soy oil trades, Fortis bought 600 December, with Bunge Chicago a buyer of 400 January. Sellers were lightly scattered among various commission houses.