December 15, 2005

 

CBOT Soy Review on Wednesday: Lower; consolidating recent gains

 

 

Chicago Board of Trade soybean futures ended Wednesday's session posting moderate declines, setting back from recent gains, as the market consolidated in a range.

 

January soybeans finished 5 cents lower at US$5.92 1/2, January soymeal settled US$3.00 lower at US$191.00 a short tonne, and January soyoil ended 25 points higher at 21.30 cents a pound.

 

Market consolidation was the theme of the day, with prices stabilizing inside of Monday's wide trading range, as the participants await supportive fundamental inputs to justify prices above the US$6.00-per-bushel level basis January futures, said John Kleist of Kleist Agricultural Consulting.

 

The lower theme was consistent for most of the day, with futures quickly sinking into negative territory after an early push higher failed to attract follow-through buying near overhead resistance at the US$6.00 level basis January.

 

Bearish crush data showing a slower-than-expected crushing pace added to the defensive sentiment, with the absence of aggressive speculative buying and weakness in inflationary markets allowing futures correct from overbought conditions.

 

The National Oilseed Processors Association monthly crush for November was 144.933 million bushels, below the average trade estimate at 147 million. The figure was below the range of estimates that span from 145.1 million to 148.0 million bushels. Soyoil stocks were pegged at 1.608 billion pounds, above the average trade estimate of 1.542 and above the range of estimates that span from 1.490 to 1.580 billion.

 

On tap for Thursday, USDA will release its weekly export sales report at 8:30 a.m. EST. Analysts surveyed by Dow Jones Newswires anticipate weekly U.S. soybean export sales for the week ended Dec. 8 to fall within a range of 500,000 to 700,000 metric tonnes.

 

In pit trades, Cargill bought 300 January and 500 March, Calyon Financial bought 500 January and O'Connor bought 1,000 March. ADM Investor Services sold 400 January, FCStonnee sold 300 March, Calyon Financial sold 500 January, Man Financial sold 500 January, and RJ O'Brien sold 700 January. Commodity funds were net sellers on the day.

 

South American soybean futures ended higher across the board. The March futures finished 6 cents lower at US$6.38.

 

 

SOY PRODUCTS

 

Soymeal futures ended lower across the board, scaling back recent gains as the market had become overextended on the upside, traders said. The ability of the January future to penetrate support at its 200-day moving average added pressure to extend the setback.

 

Soyoil futures ended higher, consolidating in range, managing to gain product share on a correction in soymeal/soyoil spread.

 

January oil share ended at 35.80%, and the January crush was at 61 cents.

 

Analysts anticipate Thursday's export sales report will show soymeal export commitments in a range of 100,000 to 150,000 metric tonnes and soyoil sales in a range of 4,000 to 9,000 tonnes.

 

In soymeal trades, ADM Investor Services bought 1,200 March, Cargill bought 300 January and O'Connor bought 500 March. RIS Div of Man Financial sold 500 January.

 

In soyoil trades, Cargill bought 300 January and 1,000 March, RIS Div of Man bought 300 January and Citigroup bought 300 March. Cargill sold 400 March and Refco sold 300 January. Commercial buying was estimated at 2,000 contracts.