December 23, 2006

 

CBOT Soy Review on Friday: Ends up, buoyed by technical buys

 

 

Chicago Board of Trade soybean futures ended Friday's abbreviated trading session higher, bolstered by technically inspired buying in the absence of fresh fundamental news.

 

January soybeans finished 9 1/4 cents higher at US$6.59 1/2, and March soybeans ended 8 1/2 cents higher at US$6.74 1/4. January soymeal settled US$1.70 higher at US$186.90 per short tonne, while January soyoil ended 32 points higher at 28.42 cents a pound.

 

Technicals were a featured attraction, with the ability of nearby futures to climb above resistance at their respective 10-day and 50-day moving averages uncovering light speculative buys, analysts said.

 

The supportive theme was consistent from the outset, with carryover momentum from the overnight session, and spillover strength from neighboring grain futures keeping buyers enthused, traders added.

 

Many traders took the opportunity to square up a few positions ahead the holidays, with light buying tied to traders buying ahead of expected index fund buying at the start of the New Year generating some underlying strength, a CBOT floor analyst said.

 

Nevertheless, overall volume was thin with favorable South American weather conditions applying overhead pressure to limit upside movement, traders added.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said Brazil's soybean areas continue to receive a beneficial pattern of warm temperatures and periodic rainfall. This weekend will bring rainfall of up to one and one-half inch in the south, and around one inch in the north. The weather trends remain favorable for excellent soybean plant development.

 

Argentina's central crop belt has a mixed outlook in its weather pattern during the next week. Showers with up to one inch of rain will occur during the coming weekend. However, next week offers the potential for drier and notably hotter conditions from Wednesday through Saturday. This feature does not appear to be a threat to crops at this time due to recent beneficial showers, but the hot-weather development will bear close monitoring for the prospect of becoming a longer-term feature than just a few days in duration, Meteorlogix said.

 

CBOT grain and soybean futures will be closed Monday in observance of the Christmas holiday.

 

In pit trades, Calyon Financial bought 500 March, Tenco bought 500 January, and ADM Investor Services bought 200 March. FCStonnee and Calyon Financial each sold 400 March, Term Commodities, Man Financial and JP Morgan each sold 200 March.

 

 

SOY PRODUCTS

 

Soy product futures ended higher across the board. Soyoil futures finished firm, rallying to new highs for the week. Technically inspired buying served as the catalyst for the gains, with the ability of futures to eclipse overhead resistance energizing the advances, analysts said.

 

Soymeal futures ended higher, buoyed by spillover strength from soybeans and neighboring grain futures. The market eased back from its highs down the stretch, as late position evening and soyoil/soymeal spreading trimmed advances, traders said.

 

January oil share ended at 43.19% and the January crush ended at 64 1/4 cents.

 

In soymeal trades, buyers and sellers were lightly scattered among various commission houses.

 

In soyoil trades, Calyon Financial bought 500 March, Goldenberg Hehmeyer and RJ O'Brien each bought 300 March. Speculative fund buying is estimated at 2,000 contracts. Calyon Financial sold 500 March.