December 17, 2005

 

CBOT Soy Review on Friday: Up on speculative buys; S America eyed

 

 

Chicago Board of Trade soybean futures ended higher Friday on speculative buying, pegged by some to be long-only index fund buying, firm midday CIF soybean basis bids and gains and record soymeal trade in key global soy importer China, brokers said.

 

Meteorlogix weather service noted a drier forecast for Argentina and southern Brazil's soy-growing areas, but traders noted another widely watched service added precipitation to those regions' two-week outlooks.

 

Argentina's soy crop was 78% planted by Thursday, the Argentine government said.

 

CBOT January soybeans finished 5 cents higher at US$5.92 1/4, January soymeal settled US$4.00 higher at US$191.40 a short tonne, and January soyoil ended 10 points lower at 21.30 cents a pound.

 

In soybean pit trades, R.J. O'Brien bought 700 March; ADM Investor Services, Citigroup and Fimat USA each bought 500 March; and Iowa Grain spread 12,00 March/January.

 

Cash U.S. soybean basis bids were mixed Friday with an 8-cent gain in Louisville, Ky., a 4-cent loss in Evansville, Ind., and a 3-cent loss in Sioux City, Iowa.

 

The spot midday CIF soybean basis bid jumped 3 cents per bushel, sources said.

 

The higher midday soybean CIF basis bid and the surprising rally overnight in Dalian soy futures, along with talk that China may have bought 4-5 Argentine soy cargoes and 2-3 U.S. soy cargoes this week, also underpinned CBOT soy futures Friday, brokers said.

 

Some speculated Chinese bird flu worries may have abated somewhat.

 

South American soybean futures ended firm Friday. The March futures ended up 4 1/2 cents at US$6.32 1/2 per bushel.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended firm Friday as speculative buying offset good commercial sales, brokers said.

 

Commodity funds bought about 2,000 lots, led by Calyon's purchase of 300 March. Bunge Grain sold 100 March and 200 January; while Cargill Inc. sold 500 January and 100 March, brokers said.

 

Spot U.S. high and low-protein soymeal basis offers were mostly unchanged Friday across the U.S. Midwest Friday, cash sources said.

 

CBOT soyoil futures ended weak Friday following losses in crude oil futures, brokers said.

 

Soyoil has benefitted from rising energy prices as traders expect additional U.S. soyoil will be used in biodiesel production.

 

O'Connor and Co. sold 1,100 January while Calyon and Tenco Inc. were light sellers of March. Fimat USA bought 600 March, the Refco division of Man Financial bought 400 January and Goldenberg Hehmeyer bought 300 March, brokers said.

 

Commercials were fairly active on both sides of the CBOT soyoil market, with Cargill trading 300 March and selling 100 May; Bunge buying 200 January and 100 March and selling 100 July and 100 May, and ADM trading 200 March.

 

The CBOT Board of Directors at its regular meeting on Tuesday approved a change to make the last delivery day for the expiring soyoil futures contract month the seventh business day following the last trading day instead of the last business day of the month. The exchange filed the proposed change on Thursday.

 

Sources contacted by Dow Jones Newswires said the change would put the expiration of the soybean oil contract more in line with the other agricultural futures contracts.

 

In addition, the CBOT also decided to reduce the maximum allowable deliverable capacity at regular soybean oil warehouses from 30 to 20 times a warehouse's registered daily rate of loading.

 

Subject to CFTC approval, the revisions would be effective for all soybean oil futures contracts from January 2007 forward.

 

January oil share ended Friday at 35.75%, and the January crush was at 63 1/4 cents.