December 16, 2005

 

CBOT Soy Review on Thursday: Lower; extends consolidation phase

 

 

Soybean futures on the Chicago Board of Trade ended moderately lower Thursday, continuing their consolidation from prior gains, as the market settled into a sideways trading pattern amid the absence of fresh supportive inputs.

 

January soybeans finished 5 1/4 cents lower at US$5.87 1/4, January soymeal settled US$3.60 lower at US$187.40 a short tonne, and January soyoil ended 10 points higher at 21.40 cent a pound.

 

The bearish forces of ample nearby supplies, sluggish export demand and a lack of support from outside markets were catalysts for lower activity, with participants unwilling to push upside moves in the face of current fundamentals, analysts said.

 

Weekly export commitments showing sales in the previous week dropping 47% and accumulated sales down 26% from last year set the tonnee of the market, with weakening cash basis levels amid increased cash movement fundamental factors.

 

The theme was consistent over the course of the day, as the market staged a minor correction from overbought conditions. Otherwise, the rolling of January positions was a featured attraction, with improved weather outlooks for Argentine crops applying underlying pressure, traders said.

 

Meanwhile, DTN Meteorlogix Weather Service said the rainfall outlook for Argentina's central soybean areas remains very promising for the middle of next week. Forecasts continue to point to showers and thunderstorms developing next Wednesday and Thursday, with rainfall of up to one inch. In southern Brazil, showers continue to be indicated in the 6- to 10-day outlook, but a lesser probability shows up in the shorter-term time frame.

 

The U.S. Department of Agriculture said Thursday that 2005-06 marketing- year sales totaled 504,100 tonnes. The primary buyer was unknown destinations at 157,000 tonnes. Pre-report estimates ranged from 500,000 to 700,000 tonnes.

 

In pit trades, RIS Div of Man Financial bought 500 January, Iowa Grain bought 1,000 January, O'Connor bought 300 March, and Prudential Financial bought 500 January and 500 March. ADM Investor Services sold 400 January, Bunge Chicago sold 300 March, Rosenthal sold 400 January and 300 May.

 

South American soybean futures ended the day posting double-digit declines. The March futures finished 10 cents lower at US$6.28.

 

 

SOY PRODUCTS

 

Soymeal futures ended lower across the board, scaling back previous gains, as the market took a breather from a recent surge in prices. Technically overbought conditions and the absence of fresh supportive news aided the price retracement, traders said.

 

Soyoil futures climbed Thursday, making modest strides to the upside, benefiting from a correction in soymeal/soil spreads. Futures managed to regain some oil share percentage by default to Thursday's setback in soymeal prices. January oil share improved to 36.35%, and the January crush was at 60 1/4 cents.

 

Soymeal export sales were 120,900 tonnes, a figure within the range of estimates from 100,000 to 150,000 tonnes. Net sales of 300 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 4,000 to 9,000 tonnes.

 

In soymeal trades, O'Connor, Refco, Citigroup and Rand Financial were featured buyers. On the sell side, Bunge Chicago sold 900 January, Cargill sold 300 January and Fimat sold 600 January,

 

In soyoil trades, Cargill, Term Commodities, Calyon Financial, Fimat and Tenco were featured buyers. ADM Investor Services, Bunge Chicago, and Calyon Financial were key sellers.