November 23, 2006

 

CBOT Soy Review on Wednesday: Edges up; stabilizes after two-sided action

 

 

Chicago Board of Trade soybean futures ended modestly higher Wednesday, managing to find stability after testing both sides of unchanged levels, traders said.

 

January soybeans finished 1-cent higher at US$6.74, and March soybeans ended 1/2-cent higher at US$6.86 3/4. December soymeal settled US$0.10 higher at US$192.10 per short tonne, while January soyoil ended 5 points lower at 29.28 cents a pound.

 

Choppy, two-sided trade was the theme of the day as traders squared positions in the shortened session ahead of Thursday's Thanksgiving Day holiday, analysts said.

 

Futures initially spiked higher on seasonal buying trends, but once the buying was exhausted, participants took profits on the gains and consolidated prices, traders said. Lower price action ensued, but the losses were short lived, as support from tightening world vegoil supplies, outlooks for a large shift in 2007 soy acres to corn and the uncertainty of South American crop potential remained an underpinning theme, traders added.

 

Meanwhile, overall activity was fairly subdued, trade positioning ahead the holiday closure promoting two-sided action, with traders unwilling to take on added risk ahead of the session's early close, a CBOT broker said.

 

CBOT agricultural markets closed at 12:00 p.m. CST Wednesday and will be closed Thursday in observance of the Thanksgiving Day holiday.

 

The DTN Meteorlogix weather forecast said rain is expected in the next few days in Argentina and Brazil, which will be good for soil moisture, but farmers in Brazil may experience some fieldwork delays.

 

On tap for Friday, U.S. Department of Agriculture is scheduled to release weekly export sales reports 7:30 a.m. CST. Analysts surveyed by Dow Jones Newswires estimate soybean commitments in the 500,000- to 800,000-metric-tonne range. Soyoil sales are seen between zero and 12,000 metric tonnes, with soymeal commitments seen in a range of 75,000 to 150,000 tonnes.

 

In pit trades, Rosenthal, JP Morgan and Shatkin/Arbor each bought 300 January. Man Financial sold 500 January, RJ O'Brien sold 300 January, and UBS Securities and Iowa Grain each sold 200 January. Speculative funds were light net buyers on the day.

 

 

Soy Products

 

Soy product futures ended mixed, with futures consolidating early price movements heading into the Thanksgiving holiday. Soyoil futures experienced two-sided trade, rallying to contract highs before retreating down the stretch, traders said. Long range world vegoil demand prospects support the move to highs, but with crude oil stumbling lower attracted profit taking pressure, analysts said.

 

Soymeal futures edged higher, recovering from early losses on the consolidation of recent soyoil/soymeal spreads.

 

December oil share ended at 42.90% and the December/January crush ended at 66 1/4 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses, with FCStone buying 500 December and ICap Trading buying 400 January.

 

In soyoil trades, buyers and sellers were widely scattered among various commission houses. ADM Investor Services bought 300 January and Bunge Chicago bought 600 January. Rand Financial sold 500 January and Tenco sold 400 January. In spreads, Term Commodities spread 1,000 January/March and UBS Securities spread 1,500 March/December.