November 30, 2005

 

CBOT Soy Review on Tuesday: Ends lower; consolidating Monday¡¯s gains

 

 

Soybean futures on the Chicago Board of Trade ended Tuesday's session on weak footing, consolidating in a range, following Monday's late short-covering bounce.

 

January soybeans finished 4 1/4 cents lower at US$5.54; January soymeal settled US$0.90 lower at US$170.80 a short tonne; and January soyoil ended 29 points lower at 21.17 cent a pound.

 

It was a day of consolidation, with the market correcting from Monday's exaggerated gains, said a CBOT commission house broker. The fundamentals of the market do not support upward price moves, he added.

 

The defensive theme was consistent from the outset, with a lagging export pace, improving crop conditions in South America and lingering worries over global feed demand amid bird flu concerns in Asia casting a bearish cloud over the market.

 

Local and speculative selling were featured attractions, as the market settled into a sideways pattern, trading inside days on technical charts. A quiet news front kept activity subdued, with traders saying the market needs a healthy dose of export demand to generate any sustainable upside momentum.

 

Meanwhile, DTN Meteorlogix said South American crops continue to experience very favorable weather. Brazilian temperatures ranged from the mid-80s to mid-90s Fahrenheit Monday, accompanied by scattered thundershowers. Additional showers are on tap for the entire Brazilian soybean belt during the next 48 hours. In Argentina, scattered thundershowers will develop in the central corn and soybean belt Tuesday, followed by a mostly dry weather pattern during the next seven days, Meteorlogix added.

 

In pit trades, ABN Amro and RJ O'Brien each bought 500 January, Refco bought 2,500 January. Calyon Financial sold 1,000 January, Prudential Financial sold 400 January, Rand Financial sold 800 January and DT Trading sold 500 January.

 

South American soybean futures ended lower. The March futures settled 3 cents lower at US$5.93 1/2.

 

 

SOY PRODUCTS

 

Soymeal futures ended lower across the board, pressured by speculative sales. The market consolidated Monday's gains, with worries over potential declines in Asian feed demand due to bird flu keeping a bearish spin on prices, traders said.

 

Soyoil futures stumbled lower, retracing Monday's gains, moving in unison with declines in soybeans. Positioning ahead of first notice day, with analysts anticipating large deliveries, was a featured attraction. Commercial buying provided light underlying support, despite the market losing product share to soymeal.

 

January oil share finished at 38.26%, and the January crush was at 54 3/4 cents.

 

Analysts expect deliveries against the CBOT December soyoil contract to fall in a range of 1,500 to 2,500 lots. Soyoil deliveries could be as high as a couple of thousand based on the amount registered, cash-connected sources said. Soymeal deliveries are seen light to moderate in a range of 50 to 400 lots

 

In soymeal trades, Cargill bought 300 January, ABN Amro bought 300 December. Refco Investor Services sold 500 December, and Man Financial sold 400 January and 300 March. Speculative funds were net sellers on the day.

 

In soyoil trades, ADM Investor Services bought 600 January, and Cargill bought 500 December and 400 January. ADM Investor Services, Man Financial and O'Connor each sold 300 January. Commercial firms were net buyers and commodity funds were net sellers.