December 23, 2005

 

CBOT Soy Review on Thursday:Up; technicals, south america weather buoy

 

 

Soybean futures on the Chicago Board of Trade ended firm Thursday, carving out a new high for the current move, buoyed by a technical buying push and concerns over dryness in soybean-growing areas in South America, traders said.

 

March soybeans finished 6 1/4 cents higher at US$6.25 1/4, March soymeal settled US$2.40 higher at US$203.60 a short tonne, and March soyoil ended 21 points higher at 21.76 cent a pound.

 

Technically inspired buying helped propel futures to new three-month highs in thin holiday trade, before the exhaustion of buying at session highs tempered upward momentum, allowing prices to settle into a choppy range, analysts said.

 

Aside from technical factors, futures had little fundamental influences to drive prices, with dry conditions in South American growing areas, decent weekly export sales and higher outside markets helping underpin prices.

 

The rolling of January positions remained a featured attraction, with trade positioning in the last full trading session ahead of the holiday weekend underlying factors on prices.

 

CBOT grain and oilseed markets close at noon CST Friday and will be closed Monday in observance of Christmas.

 

DTN Meteorlogix Weather said Argentina is forecast to experience a few showers Thursday and Friday, before drier conditions return. However, starting Thursday, conditions should cool down from Wednesday's heat. In Brazil, scattered showers are expected this weekend, but the outlook for the crop belt continues to be drier than normal, and temperatures are trending from normal to above normal, reaching the mid-90s Fahrenheit, Meteorlogix said.

 

U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 829,800 tonnes. The primary buyer was China at 295,000 tonnes. Pre-report estimates ranged from 500,000 to 700,000 tonnes.

 

The U.S. Census Bureau's crush report said 151.5 million bushels were crushed in November, in line with the average trade estimate of 151.9 million bushels.

 

In pit trades, Citigroup bought 400 March and UBS Securities bought 1,000 March, with additional buying scattered among various firms. ADM Investor Services sold 300 January, Bunge Chicago sold 500 March and UBS Securities sold 300 January. Commodity fund buying was estimated near 2,000 lots.

 

South American soybean futures ended higher. The March futures finished 7 cents higher at US$6.51.

 

 

SOY PRODUCTS

 

Soymeal futures ended firm, continuing their ascent to higher levels despite overbought conditions. Technical strength and solid underlying domestic demand were seen as supportive features, with the active March contract moving closer to filling a chart gap up to US$205.20.

 

Soyoil futures finished higher, boosted by technically motivated pre-holiday positioning and a lower-than-expected November Census stocks figure. March oil share ended at 34.83%, and the March crush was at 62 cents.

 

Census soyoil stocks were seen at 1.901 billion pounds, below the average estimate of 1.989 billion pounds as well as the low end of the range. The yield on soyoil was 11.60 pounds per bushel. Soymeal stocks were 305,238 short tonnes, below the average trade estimate of 337,000 tonnes.

 

USDA said soymeal sales were 84,100 tonnes in its weekly report, a figure below the range of estimates from 100,000 to 150,000 tonnes. Net sales of 400 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 10,000 to 20,000 tonnes.

 

In soymeal trades, buying was scattered among various firms while Cargill, Calyon Financial, Fimat and Rand Financial were key sellers.

 

In soyoil trades, ADM Investor Services bought 200 May and 200 July, ABN Amro and Calyon Financial each bought 300 March, and Man Financial bought 500 March. ADM Investor Services sold 400 March, Fimat sold 600 March, Rand Financial and Tenco each sold 200 March.