December 7, 2007

 

CBOT Soy Review on Thursday: End mixed; consolidates in two-sided trade

 

 

Chicago Board of Trade soybean futures ended mixed Thursday, struggling to find direction in two-sided action, as the market consolidated in the absence of fresh fundamental news.

 

January soybeans settled 3/4 cent lower at US$10.98 3/4 and March soybeans ended 1/4 cent higher at US$11.17 3/4. January soy meal settled US$1.10 lower at US$302.30 per short tonne. January soy oil finished 6 points lower at 45.64 cents per pound.

 

Consolidative trade produced some two-sided action, with a minor correction from recent gains applying pressure, while bullish longer-term outlooks and spillover from wheat and crude oil generated support, analysts said.

 

Carryover weakness from overnight trade weighed on futures initially, but without any aggressive sellers, futures continued to sustain its bullish trend, with a sharp bounce in crude oil producing underlying support, analysts added.

 

The market lacked fresh supportive inputs for prices to challenge recent highs, but with solid demand, uncertainty surrounding South American crops and technical strength, aggressive sellers remained sidelined, traders said.

 

The DTN Meteorlogix weather forecast said Argentina is experiencing drier-than-normal weather, which is stressful to corn and soybeans. Conditions are cooler than they have been, relieving some crop stress, but the forecast is for rising temperatures in the next couple days. Northern areas may see some thunderstorms on Sunday night into Monday. Next week, temperatures are expected to go up to above-normal levels and rainfall will decrease to below-normal levels.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative funds net sellers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly lower, as the market consolidated recent gains. Soy oil futures stumbled to two-week lows, continuing its correction from contract highs. The market has taken on a corrective theme, with strength in soy meal encouraging traders to unwind oil/meal spreads, analyst said. The market's weakness allowed futures to divorce itself from the influence crude oil that rallied over US$2.00 a barrel.

 

Soy meal futures ended lower, taking a step back on profit-taking after extending to new contract highs for second consecutive day, analysts said. Solid export demand, technical strength and outlooks for a pick up in feed demand due to cold Midwest weather was supportive, while a lack of fresh news attracted some profit-taking, traders added.

 

January oil share ended at 43.02% and the January crush ended at 68 1/4 cents.

 

In soy meal trades, buyers and sellers were scattered among various commission houses, with Fimat selling 800 March. Speculative fund selling was estimated at 1,000 lots.

 

In soy oil trades, JP Morgan bought 500 May, Citigroup bought 300 January, Fimat bought 600 January, and Prudential Financial bought 400 January. Bunge Chicago sold 300 January. Speculative fund selling was estimated at 2,000 lots.