December 22, 2006

 

CBOT Soy Review on Thursday: Edge up on light speculative buys in thin trade

 

 

Chicago Board of Trade soybean futures ended Thursday's session posting modest gains, underpinned by light speculative and fund buying in thin holiday type trade.

 

January soybeans finished 2 cents higher at US$6.50 1/4, and March soybeans ended 2 1/4 cents higher at US$6.65 3/4. January soymeal settled US$0.50 higher at US$185.20 per short tonne, while January soyoil ended 10 points higher at 28.10 cents a pound.

 

The market garnered support from speculative buys, with decent export demand, carryover strength from overnight action and mildly supportive Census crush data attracting buyers, said Jack Scoville, analyst with the Price Futures Group in Chicago.

 

Overall activity was fairly subdued, as futures remain in holiday mode, but with speculative funds providing a minor push to prices, soybeans managed to hold firm throughout the day, traders said.

 

However, the absence of any weather threats to South American crops, and January prices gravitating toward the US$6.50 strike ahead of Thursday's option expiration attracted end of the day local and speculative position squaring to trim advances down the stretch, traders added.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said South American crop areas have a moderate weather pattern ahead of the weekend. The heaviest precipitation in store will be in Rio Grande do Sul in southern Brazil, which took in around one inch of rain during Wednesday, and has another moisture round with up to one and one-half inch rainfall in store through Saturday. Argentina will have periodic showers through Monday, followed by drier weather. Northern Brazil's Mato Grosso province has isolated showers, Meteorlogix said.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 742,000 metric tonnes. Trade estimates called for commitments in the 550,000- to 900,000-tonne range. USDA said private exporters reported the sale of 120,000 metric tonnes of soybeans to China for delivery in the 2006-07 marketing year.

 

The Census Bureau put the November crush at 155 million bushels, on par with the average of estimates from a Dow Jones Newswires survey of analysts. Soyoil stocks were put at 3.096 billion pounds compared to the average estimate of 3.026 billion pounds. Soymeal stocks were 373,563 short tonnes, in line with the analyst estimate of 373,500.

 

In news, Argentina's year-on-year soybean exports fell 37.4% to 479,832 metric tonnes in September, the latest Agriculture Secretariat data shows. Argentina's soybean oil exports rose 30.5% to 528,327 metric tonnes in September compared to the same month a year ago.

 

In pit trades, UBS Securities bought 400 March and Man Financial bought 500 March. Speculative fund buying was estimated near 1,000 lots. Sellers were lightly scattered among various commission houses.

 

Day session volume on the e-CBOT platform was 32,563 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended higher, in step with advances in soybeans. Soyoil edged up on spillover from soybeans, technical buying and overnight strength in Malaysian palm oil futures, traders said. The market was able to shake off the effects of a higher-than-expected census stocks figure, as traders said the increase was reflective of the rise seen in NOPA stock figure last week.

 

Soymeal futures ended with light gains, climbing to new highs for the week on borrowed strength from soybeans, traders said.

 

January oil share ended at 43.14% and the January crush ended at 66 1/4 cents.

 

In soymeal trades, JP Morgan bought 600 March, Man Financial and Fimat each bought 400 March, and Bunge Chicago bought 300 March. Speculative fund buying was estimated at 1,500 contracts. Sellers were lightly scattered.

 

In soyoil trades, buyers and sellers were scattered among various firms with JP Morgan buying 300 January, Citigroup bought 200 March, and Bunge Chicago sold 300 January and 200 March.