December 15, 2006

 

CBOT Soy Review on Thursday: Ends higher on speculative buys, solid exports

 

 

Chicago Board of Trade soybean futures ended Thursday's session posting modest gains, supported by light speculative and local buying.

 

January soybeans finished 1 3/4-cents higher at US$6.62 3/4, and March soybeans ended 1 1/2-cents higher at US$6.77 1/2. January soymeal settled US$0.50 higher at US$189.20 per short tonne, while January soyoil ended 17 points lower at 28.39 cents a pound.

 

Futures found support from solid weekly export sales, spillover strength from corn and light technical buying associated with the market's inability to attract follow through selling on opening losses, analysts said.

 

Overall activity was subdued, with advances held in check by a NOPA crush figure at the low end of estimates, favorable South American crop conditions and underlying liquidation pressure, as the market settles into a choppy, holiday trading mode, traders added.

 

The market was due for a minor bounce after two consecutive days of losses, a CBOT floor analyst said. A supportive private 2007 acreage estimate added mild support, but did little to extend advances, as the trade has been dialing in a smaller 2007 U.S. soy acreage outlook for some time, he added.

 

Private analytical firm Informa Economics estimated 2007-08 U.S. planted U.S. soybean acreage at 70.434 million acres, down 5.131 million from 2006, while raising 2007-08 U.S. planted corn acreage 7.361 million to 85.922 million acres.

 

The DTN Meteorlogix Weather Service forecast said conditions remain on the very warm to hot and dry side in southern Brazil's Rio Grande do Sul state during the next three days. Temperatures will reach more than 100 degrees Fahrenheit in the region. Scattered thundershowers are in store for next week, and will be important to alleviate crop stress, Meteorlogix reports.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 906,000 metric tonnes. Trade estimates called for commitments in the 600,000- to 1,000,000- tonne range.

 

The National Oilseed Processors Association reported its members crushed 148.198 million bushels of soybeans during November. The figure was below the average trade estimate of 150.8 million bushels, and down from the 154.984 million NOPA reported for the month of October. Estimates for the report ranged from as low as 147.9 million bushels to as high as 153.3 million bushels.

 

In pit trades, ADM Investor Services bought 600 March, Calyon Financial, Merrill Lynch and RJ O'Brien each bought 300 March. Speculative fund buying was estimated at 2,000 contracts. Sellers were lightly scattered among various commission houses.

 

Day session volume on the e-CBOT platform was 39,569 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal holding firm in step with soybeans. Supportive weekly export sales and technical strength associated with nearby contracts holding above technical support levels underpinned prices, analysts said.

 

Soyoil futures ended lower across the board, shrugging off spillover support from higher energy futures on consolidative sales, analysts say. Futures pushed higher in unison with soybeans and crude oil for most of the day, but with large nearby supplies and the inability to challenge Wednesday's highs uncovered speculative selling to send prices retreating into the close, traders added.

 

January oil share ended at 42.87% and the January crush ended at 65 3/4 cents.

 

In soymeal trades, speculative funds were estimated net buyers on the day, with Fimat a buyer of 400 March. Sellers were lightly scattered among various commission houses.

 

In soyoil trades, ADM Investor Services, Bunge Chicago and JP Morgan each bought 300 January, with selling light scattered among various commission houses. Speculative fund buying was estimated at 1,000 contracts.