November 28, 2006
 
CBOT Soy Review on Monday: Ends up on speculative buys; early gains trimmed

 

 

Chicago Board of Trade soybean futures ended higher Monday, but off early advances as the market lacked follow-through momentum to challenge contract highs set overnight, analysts said.

 

January soybeans finished 3 3/4 cents higher at US$6.88, and March soybeans ended 5 1/4 cents higher at US$7.02. January soymeal settled US$1.50 higher at US$198.10 per short tonne, while January soyoil ended 20 points higher at 29.50 cents a pound.

 

Futures chopped around for most of the day, trying to hold its early gains, as the inability of futures to extend the initial highs coupled with light hedge-related selling encouraged some profit-taking selling, said Jack Scoville, analyst with the Price Futures Group in Chicago.

 

Good pricing resting above the market and ideas futures had satisfied a near-term upside objective managed to cap upside gains, but bullish technical momentum remains an underpinning force, traders added.

 

Futures gapped higher initially in a continuation of the technically inspired overnight gains that produced new highs. Supportive price action in Asian markets as well as speculative interest associated with weakness in the U.S. dollar helped support the higher tonnee as well, traders said.

 

Nevertheless, without a spark to extend the gains and spillover pressure from wheat, upside movements was capped. Traders said upside technical momentum remains intact, but without aggressive speculative buying upward moves will continue to run out of steam, a CBOT floor analyst said.

 

The DTN Meteorlogix weather forecast said soybean-growing areas of Brazil saw rain in the past weekend, with up to 1 1/2 inches reported in Rio Grande do Sul and Parana. The areas are expected to see more through Wednesday, up to 1 1/2 inches in Mato Grosso and Mato Grosso do Sul. Conditions are expected to be drier by the end of the week. In Argentina, weekend thunderstorms were good for soybeans, Meteorlogix reports.

 

Monday afternoon, Commodity Futures Trading Commission is scheduled to release its weekly commitment of traders report 2:30 p.m. CST and the U.S. Department of Agriculture will release its last weekly crop progress report of the season 3:00 p.m. CST.

 

In pit trades, JP Morgan bought 1,000 January and ADM Investor Services bought 500 March. UBS Securities, Calyon Financial and RJ O'Brien each sold 500 January, and JP Morgan sold 300 March.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board, buoyed by speculative buying. Soyoil continued in its role as the upside leader of the products, with solid underlying demand, strength in world vegoils markets and bullish long-range demand prospects keeping futures in an uptrend, analysts said. Overnight price strength and the market's ability to carve out new contract highs set the stage for the gains, with borrowed strength from outside energy markets aiding the firm tonnee as well, analysts added.

 

Soymeal futures ended up, feeding off the supportive tonnee in soybeans. Futures rallied to two-week highs, with technical buying aiding higher price action, traders said.

 

January oil share ended at 42.69% and the January crush ended at 72 1/4 cents.

 

In soymeal trades, JP Morgan bought 600 January and 300 December. JP Morgan sold 300 December.

 

In soyoil trades, Fimat bought 500 January, JP Morgan bought 300 January, with Bunge Chicago and RJ O'Brien each buying 200 January. Citigroup sold 600 March, and Calyon Financial and Man Financial each sold 200 January.