December 8, 2006

 

CBOT Soy Review on Thursday: Ends up; speculative, commercial buys support

 

 

Chicago Board of Trade soybean futures ended higher across the board Thursday, bouncing back from recent profit-taking setbacks on light speculative and commercial buying.

 

January soybeans finished 7 3/4 cents higher at US$6.62, and March soybeans ended 8 cents higher at US$6.76 1/4. January soymeal settled US$3.70 higher at US$190.50 per short tonne, while January soyoil ended 5 points lower at 28.73 cents a pound.

 

The market managed to find some stability, benefiting from the exhaustion of profit-taking sales and solid underlying demand, said Joe Victor, analyst with Allendale Inc. in McHenry, Ill.

 

Optimistic long-range demand prospects provided underlying support to lift prices, with talk of interest from world importers being spiked by recent price declines kept a floor under prices, analysts said.

 

Spillover strength from corn as well as supportive price movements in soymeal served as positive influences to keep prices firm in relatively quiet trade, traders added. However, favorable South American crop conditions and a lack of speculative fund participation kept a lid on advances as well, a floor trader said.

 

The DTN Meteorlogix weather forecast said in the primary South American crop areas, scattered showers continue to be a weather feature. The most notable rains in the last couple days were in Mato Grosso and Parana provinces. Argentina is also seeing some showers. Rio Grande do Sul, in far-southern Brazil, has the driest weather pattern. The general trend is still favorable for crops in South America. However, the Rio Grande do Sul dryness will bear watching.

 

In pit trades, Bunge Chicago and Goldenberg Hehmeyer each bought 300 January, Rosenthal bought 400 January and 500 March.

 

On the sell side, UBS Securities sold 1,000 January, Rand Financial sold 500 January, and Goldenberg Hehmeyer sold 300 January.

 

 

SOY PRODUCTS

 

Soy product futures ended mostly higher, with soymeal the upside leader. Soymeal futures rallied on technically inspired buying and product spread unwinding, analysts said. The market was buoyed by technical buys, as the market back filled a chart gap on technical charts from Monday, traders said. A continuation of spread unwinding and underlying demand served as positive forces to keep futures firmly underpinned, a trader added.

 

Soyoil futures ended mixed, with nearby contracts stumbling on the unwinding of soyoil/soymeal spreads. Strong weekly export sales and long-range demand prospects for biodiesel continues to provide price support, but with speculative traders evening up a few more positions, upside potential was limited, a CBOT floor analyst said.

 

January oil share ended at 42.99% and the January crush ended at 73 1/4 cents.

 

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

 

In soyoil trades, buyers and sellers were scattered among various commission houses, with Fimat a buyer of 400 January, and Bunge Chicago and RJ O'Brien each buyers of 200 January. ADM Investor Services sold 300 January.