January 6, 2007

 

CBOT Soy Review on Friday: Higher on week-end position squaring

 

 

Chicago Board of Trade soybean futures ended higher Friday, bouncing back from early weakness on end-of-the-week position evening.

 

January soybeans finished 5 1/4 cents higher at US$6.68, and March soybeans ended 6 cents higher at US$6.81 1/2. March soymeal settled US$2.60 higher at US$195.90 per short tonne, while March soyoil ended 15 points higher at 28.80 cents a pound.

 

The market managed to find its footing, clawing back from recent declines as traders reconciled a few positions heading into the weekend, a CBOT floor analyst said.

 

Futures found stability after satisfying near term downside technical objectives, with short covering emerging after early selling pressure was exhausted, traders added.

 

Active contracts carved out two-week lows, sinking firmly below major moving average support in early trade. However, as selling pressure faded and spillover support from corn and crude oil emerged, futures found strength to bounce into the close, traders added.

 

Nevertheless, upside movement was limited amid bearish South American crop conditions, lackluster weekly export sales and outlooks for higher production and stocks data in next week's U.S. Department of Agriculture crop reports.

 

Meanwhile, private analytical firm Informa Economics estimated U.S. 2006-07 soybean production at 3.263 billion bushels with a yield of 43.8 bushels per acre. USDA is scheduled to release its crop production forecast Jan. 12.

 

The DTN Meteorlogix Weather Service forecast said South American crop areas have no major weather problems at this time. Southern Brazil had rainfall Thursday of from one to four inches, and northern Brazil has showers and thunderstorms with up to one inch precipitation in store this weekend. Temperatures will be warm but not hot. Crops will continue to have favorable weather in the near term.

 

In Southeast Asia, the palm oil production areas have a continued unsettled weather pattern, with rainfall expected this weekend in Indonesia and Malaysia. Additional crop loss may occur, besides the losses that were noted during heavy rains and flooding in December.

 

In pit trades, buyers and sellers were scattered among various commission houses, with Fimat a featured buyer. UBS Securities sold 700 March, Citigroup sold 400 March, and ADM Investor Services sold 300 March.

 

Day session volume on the e-CBOT platform totaled 31,151 lots.

 

 

SOY PRODUCTS

 

Soy product futures ended higher. Soyoil futures bound higher after a choppy two-sided session, managing to recover from prior setbacks on week-end positioning, traders said. Spillover support from a recovery in crude oil and soybeans served as catalysts to spark upside gains after futures fell to two-lows, traders added.

 

Soymeal futures climbed in unison with soybeans. Spillover strength from neighboring grains aided the higher tonnee, with the ability of nearby futures to raise above major moving average resistance on technical charts uncovering buying interest as well, analysts said

 

January oil share ended at 42.64% and the March crush ended at 66 1/4 cents.

 

In soymeal trades, buyers and sellers were widely scattered among various commission houses. Bunge Chicago bought 200 March and Fimat bought 200 May. Bunge Chicago and Citigroup each sold 400 March, and RJ O'Brien sold 500 March.

 

In soyoil trades, Citigroup, Fortis and Rand Financial each bought 300 March, with ADM Investor Services, JP Morgan and Bunge Chicago featured buyers. Fortis sold 500 March, Tenco sold 600 July, Iowa Grain and Man Financial each sold 400 March. Citigroup sold 400 December, Fimat and JP Morgan each sold 300 March.