December 2, 2006

 

CBOT Soy Review on Friday: Ends down on week-end position squaring

 

 

Chicago Board of Trade soybean futures ended lower Friday, retreating from prior advances on end of the week profit taking, analysts say.

 

January soybeans finished 8 1/2 cents lower at US$6.77, and March soybeans ended 8 1/4 cents lower at US$6.92. January soymeal settled US$5.60 lower at US$190.40 per short tonne, while January soyoil ended 5 points higher at 29.67 cents a pound.

 

A quiet news front failed to provide directives for futures, with traders taking the opportunity to lighten up a few positions heading into the weekend, a CBOT floor analyst said. The defensive tonnee was consistent from the outset, with a lack of speculative buying and spillover weakness from neighboring grain futures helping promote the lightly traded downward move, traders added.

 

Technically inspired selling was a featured attraction, will declines accelerating once active contracts penetrated Thursday's lows and nearby moving average support levels, traders said.

 

Overall activity was fairly subdued, with the absence of any significant speculative buying allowing the downward move to extend with little resistance, a CBOT broker said. Despite the lower move, the price declines struggled to find follow through momentum, as traders remain leery of fresh speculative buying emerging on breaks, he added.

 

Meanwhile, the DTN Meteorlogix weather forecast said southern Brazil will have thundershowers Sunday into Monday, with up to one inch of rain. Northern Brazil soybean areas had rainfall of up to one inch in Mato Grosso on Thursday. Showers are moving into Mato Grosso do Sul on Friday. Most areas of northern Brazil should have at least moderate rainfall in the next five days. In Argentina, thundershowers today and Saturday will bring up to one inch of rain. These periodic showers are favorable for corn and soybean development.

 

In pit trades, buyers and sellers were scattered among various commission houses.

 

Day session volume on the e-CBOT platform was 32,989 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal stumbling to two-week lows on technically inspired speculative selling. The absence of supportive news allowed selling pressure to surface, with bearish deliveries and spreading between the products sending soymeal backpedaling to lower levels. The markets ability to penetrate underlying support levels opened the door for futures to stumble into the close, a trader said.

 

Soyoil futures ended higher across the board. The market rebounded from early weakness on a recovery in crude oil futures, spreading associated with the drop soymeal prices and long range demand prospects, analysts said.

 

January oil share ended at 43.79% and the January crush ended at 68 1/4 cents.

 

In soymeal trades, Bunge Chicago bought 300 January and JP Morgan bought 300 December and 200 January. Sellers were widely scattered among various commission houses.

 

In soyoil trades, speculative funds were net buyers on the day. Rand Financial bought 800 March, Fortis bought 400 January and Shatkin/Arbor 300 March. Sellers were scattered among various commission houses.