December 13, 2006

 

CBOT Soy Review on Tuesday: Grind lower on consolidative sales

 

 

Chicago Board of Trade soybean futures ended lower Tuesday, backpedaling from Monday's gains on light consolidative sales.

 

January soybeans finished 3 3/4 cents lower at US$6.63, and March soybeans ended 4 1/4 cents lower at US$6.78 1/2. January soymeal settled US$0.40 lower at US$189.90 per short tonne, while January soyoil ended 34 points lower at 28.69 cents a pound.

 

The absence of supportive features to underpin prices produced a turnaround Tuesday effect, with prices staging a minor correction from Monday's overdone gains, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

Futures consolidated from Monday's highs in a thin pre- holiday trading environment, with the inability of futures to push through nearby technical support uncovering selling pressure, traders added.

 

Carryover momentum from Monday's firm technical close generated early support. But forecasts calling for favorable South American crop conditions coupled with corn's inability to challenge Monday's highs cast a cloud over the market and attracted selling interest as well, analysts said.

 

The lower theme was consistent throughout most of the day, with prices easily drifting lower in thinly traded end-of-the year markets, a floor trader said.

 

Meanwhile, the DTN Meteorlogix weather forecast said southern Brazil has a generally very warm to hot and dry weather pattern through the latter part of this week. The most stressful weather is in Rio Grande do Sul. This province, in far southern Brazil, will have temperatures during the daytime reaching well into the 90s Fahrenheit this week. The next notable chance at rainfall for Rio Grande do Sul does not appear until the middle part of next week. Farther north, Parana province has periodic showers in store through the end of the week.

 

In Argentina, showers and thunderstorms with up to one inch of rain are forecast over most of the soybean belt during the next three days. This round of moisture will be beneficial to crops, and will be accompanied by moderate temperatures, Meteorlogix forecasts.

 

In pit trades, Tenco bought 800 January, Calyon Financial bought 500 January and JP Morgan bought 400 March. On the sell side, RJ O'Brien, Rand Financial and Rosenthal each sold 200 January.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soyoil retracing a portion of Monday's gains amid a lack of follow-through momentum. Corrective speculative sales served as the catalyst for the declines, with light soyoil/soymeal spread unwinding adding to the defensive tonnee, analysts said.

 

Soymeal futures ended narrowly mixed, consolidating inside Monday's trading range. The market drew support from product spreading amid ideas the market had less speculative liquidation pressure following prior end-of-year position squaring, traders added.

 

January oil share ended at 42.88% and the January crush ended at 70 1/4 cents.

 

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

 

In soyoil trades, Prudential Financial bought 500 January, with Fimat buying 200 January and 300 May. Rand Financial sold 800 March, Calyon Financial and Man Financial each sold 300 January, JP Morgan sold 300 March and Rand Financial sold 800 March.