December 22, 2005

 

CBOT Soy Review on Wednesday: Ends up; climbs in late action

 

 

Soybean futures on the Chicago Board of Trade ended higher Wednesday, managing to claw their way back into positive territory down the stretch on technical buying and spillover from soymeal.

 

March soybeans finished 2 1/2 cents higher at US$6.19, March soymeal settled US$2.60 higher at US$201.20 a short tonne, and March soyoil ended 1 point higher at 21.55 cent a pound.

 

End-of-the-day position squaring, continued strength from soymeal and the easing of speculative selling down the stretch opened the door for the late recovery in relatively quiet trade, traders said.

 

Spillover momentum from soymeal remains the driver of prices, as the absence of fresh fundamental news continues to keep technical factors in play, with the strength of meal keeping bullish traders enthused, said a cash- connected CBOT trader.

 

Otherwise, activity was fairly quiet, with the market suffering from a technical setback for most of the day, until a late bounce in soymeal filtered in to lift futures. Nevertheless, technical analysts said the inability of the March future to push above US$6.20 took some edge off prices.

 

The rolling of January positions remained a featured attraction, with mild concerns over dryness in Argentina keeping a level of risk premium in prices.

 

DTN Meteorlogix said Argentina growing areas are experiencing hot and dry conditions, with minimal chances of scattered showers over the coming week.

 

Meanwhile, the U.S. soybean crush for November is expected to be 151.9 million bushels in the U.S. Census Bureau's monthly report, up from the October figure of 158.2 million bushels. The Census crush report is scheduled for release Thursday at 8 a.m. EST. Soyoil stocks are seen increasing to 1.989 billion pounds in the report, up from 1.887 billion the previous month. November soymeal stocks are seen increasing to 337,000 short tonnes, up from 316,100 in October.

 

U.S. Department of Agriculture 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. 15 to fall within a range of 500,000 to 700,000 metric tonnes.

 

In pit trades, ADM Investor Services, Bunge Chicago and O'Connor each bought 500 March, Rand Financial bought 700 March and Calyon Financial bought 2,000 March. Sellers were scattered among various firms. Find buying was estimated at 3,000 contracts.

 

South American soybean futures ended higher. The March futures finished 2 cents higher at US$6.44.

 

 

SOY PRODUCTS

 

Soymeal futures ended higher across the board, bouncing back from early declines on technically motivated buying. The inability of the market to attract aggressive selling on an early setback served as a spark for prices to climb to session highs down the stretch. The allure of filling a chart gap -US$202.00-US$205.20 - remains a near-term objective that keeps buying flowing, said a CBOT broker.

 

Soyoil edged higher, climbing back from one-week lows set early in the session. Follow-through selling from Tuesday's bearish chart action and bearish stocks forecasts applied pressure, while light technical and commercial buying enabled futures to remain underpinned. March oil share slipped to 34.88%, and the March crush was at 60 3/4 cents.

 

In soymeal trades, Man Financial, Bunge Chicago and ADM Investor Services were key buyers, with Fimat, ADM Investor Services and Cargill sellers.

 

In soyoil trades, commercial buying was estimated at 2,200 contracts with ADM Investor Services, Bunge Chicago and Cargill key buyers along with commission buying from Fimat. Rand Financial, ABN Amro and Calyon Financial were key sellers, with commodity fund selling pegged at 1,500 lots.