December 9, 2006

 

CBOT Soy Review on Friday: Ends down on end-of-week positioning

 

 

Chicago Board of Trade soybean futures ended lower Friday, peeling back some of Thursday's gains on end-of-the-week and pre-crop report positioning.

 

January soybeans finished 6 cents lower at US$6.56, and March soybeans ended 4 cents lower at US$6.72 1/4. January soymeal settled US$2.40 lower at US$188.10 per short tonne, while January soyoil ended 10 points lower at 28.63 cents a pound.

 

The absence of any fresh supportive news, a lack of speculative buying, and ideas the market is more vulnerable to the possibility of bearish data in Monday's supply and demand report combined to attract selling interest, said Bill Nelson, associate vice president A.G. Edwards and Sons in St. Louis.

 

Soft market technicals, spillover weakness from neighboring grains and favorable South American crop conditions on top of ample nearby supplies gave buyers little inspiration in the absence of active speculative fund participation, traders added.

 

The slowness of export sales in recent weeks has traders concerned that the U.S. Department of Agriculture could adjust exports downward in Monday's report, said Nelson. Beneficial rains in central and western Brazil were a bit of a bearish omen for prices as well, Nelson added.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its December supply and demand report 7:30 a.m. CST. In a survey conducted by Dow Jones Newswires, the average of analysts' estimates pegs soybean-ending stocks at 566 million bushels, up 1 million from November's forecast. The estimates ranged between 515 million and 610 million bushels.

 

The DTN Meteorlogix weather forecast said South America's main soybean areas continue to have mostly favorable crop weather. Mato Grosso, Brazil, the largest soybean-producing state in Brazil, has up to one and one-half inch of rain in store through the beginning of next week. Argentina also has a scattered shower pattern in its outlook. The only area of concern in South America is Rio Grande do Sul in far-southern Brazil, where conditions have turned dry in the last two weeks.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses, with JP Morgan a buyer of 600 November.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, setting back in unison with soybeans. Pre-weekend position squaring weighed on both soyoil and soymeal down the stretch, traders said. Soyoil found early support from light speculative buying and product spreading. However, the inability of futures to challenge overhead resistance attracted selling pressure to plant prices in negative territory down the stretch, analyst say.

 

Soymeal stumbled lower, succumbing to spillover pressure from soybeans, with end-of-the week positioning weighing on prices as well, traders said.

 

January oil share ended at 43.22% and the January crush ended at 72 3/4 cents.

 

In soymeal trades, JP Morgan bought 300 January, with sellers scattered among various commission houses.

 

In soyoil trades, scattered buying from various commission houses were seen, with Stern a buyer of 400 January, and Bunge Chicago a buyer of 200 January.