December 2, 2005

 

CBOT Soy Review on Thursday: Ends firm, finds technical support

 

 

Soybean futures at the Chicago Board of Trade ended a choppy two-sided session firm Thursday, as technically inspired buying provided a late spark to plant futures in positive territory. January soybeans finished 1 3/4 cents higher at US$5.59 3/4, January soymeal settled US$0.40 higher at US$172.50 a short tonne, and January soyoil ended 2 points lower at 21.27 cent a pound.

 

Speculative buying, a firm cash basis and just enough commercial buying beneath the market provided the means for the day's advances in the face of bearish fundamentals, analysts said.

 

Two-sided action was a featured attraction for most of the day, with lackluster weekly export sales, improved crop conditions in South America and bird flu worries applying pressure. However, oversold market conditions limited selling interest near the lows, with commercial buying amid tight farmer holding keeping cash bids firm.

 

The theme was consistent until spec buying uncovered pre-placed buy orders above Wednesday's highs to firmly plant prices in positive territory down the stretch. Nevertheless, futures tempered their gains heading into the close, with the inability of the January contract to find follow-through buying as prices neared resistance in the US$5.65 area attracting speculative and local selling dropped prices back below the psychological US$5.60 price level, said a CBOT commission house broker.

 

The U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 370,800 tonnes. The primary buyer was China at 292,800 tonnes. Pre-report estimates ranged from 400,000 to 600,000 tonnes.

 

DTN Meteorlogix said both Brazil and Argentina have episodes of showers and thundershowers in store during the next five days. This shower trend will again provide good conditions for growth and development of the South American soybean crop. Argentina shows some trend toward drier weather in its longer-range outlook covering the next two weeks; however, the near-term prospects remain very favorable, Meteorlogix added.

 

In pit trades, ADM Investor Services bought 400 January and 400 March, Refco bought 800 January, Fimat bought 1,000 January, Calyon Financial, Citigroup and O'Connor each bought 400 January. Goldenberg Hehmeyer, Man Financial, Iowa Grain and RJ O'Brien were featured sellers. Commodity fund buying was estimated at 1,500 contracts.

 

South American soybean futures ended higher. The March futures settled 2 1/2 cents higher at US$5.99 1/2.

 

 

Soy Products

 

Soymeal futures ended higher, consolidating in a sideways pattern, with lower-than-expected weekly export sales applying pressure, while technical buying helped underpin the market.

 

Soyoil futures ended mixed, following the two-sided trend filtering through the complex, with speculative led selling weighing on prices, while commercial buying supplied underlying support.

 

January oil share finished at 38.14%, and the January crush was at 53 3/4 cents.

 

In soymeal trades, Fimat bought 400 December and 400 January, Cargill sold 400 January and 500 July.

 

In soyoil trades, ADM Investor Services, Fimat, Iowa Grain and O'Connor were featured buyers, while Fimat, Citigroup, Calyon Financial and ABN Amro were key sellers.