December 28, 2006

 

CBOT Soy Review on Wednesday: Settles down in light consolidative trade

 

 

Chicago Board of Trade soybean futures ended Wednesday's session posting modest declines, setting back after a choppy, two-sided round of sideways trade.

 

January soybeans finished 2 cents lower at US$6.69 1/2, and March soybeans ended 1 1/4 cent lower at US$6.85 1/4. March soymeal settled US$0.30 lower at US$193.80 per short tonne, while March soyoil ended 6 points higher at 29.38 cents a pound.

 

Profit-taking from Tuesday's staunch gains amid an absence of any significant speculative buying pressured prices, while supportive technicals and longer range demand prospects provided underlying themes to keep a floor under prices, analysts said.

 

The market settled into a choppy, narrow trading range for most of the day, consolidating within Tuesday's wide trading range, traders said.

 

Otherwise, spreading activity was featured in thin holiday trade, as participants position themselves ahead of Friday's first notice day for January futures. Overnight declines in Asian markets, spillover pressure from neighboring grain futures and bearish South American crop conditions helped promote a defensive theme as well, traders added.

 

As a reminder, the U.S. Department of Agriculture's weekly export sales report, normally released Thursday, will be delayed until Friday at 7:30 a.m. CST due to Monday's Christmas Day holiday.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said that in South America, the only notable stress feature in weather during the next five days is in Rio Grande do Sul, Brazil. There, a brief spell of dry and hot weather, with temperatures reaching into the upper-90s Fahrenheit, will occur during the weekend. However, stress to crops will be minimal due to generous rainfall during the past week in southern Brazil. A new shower pattern moves into the region during the middle of next week.

 

Malaysia's palm oil production areas incurred some flood damage from very heavy rainfall during Monday and Tuesday. However, the overall impact to production of this tropical-region crop looks to be minimal at this time.

 

In pit trades, buyers and sellers were widely scattered among various commission houses. Speculative funds were light net sellers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended narrowly mixed in quiet holiday-type trade. Soyoil futures tested both sides of unchanged levels during the day, consolidating from Tuesday's sharp gains. The absence of any fresh news promoted the sideways theme, while bullish longer-term demand prospects kept a floor under prices, analysts said.

 

Soymeal futures chopped around in sideways fashion as well, but did manage to scratch out some product share on product spread unwinding, traders said.

 

January oil share ended at 43.36% and the March crush ended at 64 1/4 cents.

 

In soymeal trades, buying and selling was spread across various commission houses, with Fimat a buyer of 300 March.

 

In soyoil trades, buyers and seller were widely scattered among various commission houses, with Tenco buying 500 March, UBS Securities sold 400 January, and Fimat a seller of 300 March.