December 18, 2007

 

CBOT Soy Review on Monday: Mixed; consolidates on profit-taking

 

 

Chicago Board of Trade soybean futures ended mixed Monday, capping off a choppy, two-sided day of trading filled with consolidative profit-taking from prior gains.

 

January soybeans settled 1/4 cent lower at US$11.56 3/4 and March soybeans ended 1 cent higher at US$11.76. January soymeal settled US$1.20 lower at US$324.70 per short tonne. January soyoil finished 5 points lower at 46.17 cents per pound.

 

The market's initial rally failed to push prices through resistance contract highs, and that uncovered willing sellers on the mode of profit-taking, said Brian Hoops, president Midwest Market Solutions in Yanktonne, S.D.

 

The market is in the last full trading week of the year, and any sign of upside exhaustion will serve as an opportunity for traders to book some profits, analysts said.

 

Spillover weakness from a turnaround in wheat futures, and declines in outside inflationary markets applied pressure, but long bullish outlooks, strong demand and technical strength remain underpinning features to offset defensive pressure, analysts added. The DTN Meteorlogix weather forecast said the situation in Brazil's Rio Grande do Sul bears watching for any signs of a significant La Nina-induced dry pattern becoming established.

 

In Argentina, the prospect of warm to hot weather this week bears watching as soil moisture supplies may be quickly depleted should thunderstorms fail to materialize as expected, Meteorlogix said. There is the concern that a La Nina-induced dry pattern could impact the region at some point during the growing season, according to the forecast. La Nina, the term given to describe below-average temperatures in the eastern half of the Pacific Ocean off the South America coast, has a strong relationship to dry weather in southern Brazil through Argentina, Meteorlogix reports.

 

In pit trades, Iowa Grain and Merrill Lynch each bought 300 January, with sellers scattered among various commission houses.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with soymeal garnering support from underlying domestic and export demand. Light meal/oil spreading generated buying interest to support prices, while year-end position squaring applied pressure, analysts said.

 

Soyoil futures ended mostly lower, succumbing to spillover weakness from crude oil futures, meal/oil spreads and light consolidative measures, analysts added.

 

January oil share ended at 41.55% and the January crush ended at 65 1/2 cents.

 

In soymeal trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated sellers of 1,000 lots.

 

In soyoil trades, JP Morgan bought 300 January, ADM Investor Services sold 500 January and 600 March. Speculative fund selling was estimated at 2,000 lots.