December 16, 2006

 

CBOT Soy Review on Friday: Lower, backpedals on consolidative sales

 

 

Chicago Board of Trade soybean futures ended lower Friday, backpedaling from Thursday's gains on speculative-led consolidative sales, analysts said.

 

January soybeans finished 5 1/4 cents lower at US$6.57 1/2, and March soybeans ended 5 1/4 cents lower at US$6.72 1/4. January soymeal settled US$2.50 lower at US$186.70 per short tonne, while January soyoil ended 24 points lower at 28.15 cents a pound.

 

The market was on the defensive throughout the day, with pre-holiday liquidation and technical pressure encouraging some end-of-the-week profit-taking, a CBOT floor analyst said.

 

Overall activity was fairly subdued, with light selling pressure easily extending declines amid the absence of any significant buyers in the market, he added.

 

Nevertheless, futures remained confined within recent trading ranges, hovering between support and resistance levels, with solid underlying demand keeping a floor under prices, analysts said. The sideways theme is expected to continue through the end of the year as the market has settled into holiday mode, analysts added.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said it will be mainly dry and very warm in southern Brazil during the weekend. Daytime temperatures will reach into the upper 90s Fahrenheit. Forecast charts still have a better chance of rainfall during mid to late next week, but temperatures will stay above normal. Northern Brazil and Argentina have few crop weather problems at this time. Periodic showers are in the outlook for Mato Grosso and Argentina during the next three to five days. These showers will maintain favorable crop conditions, Meteorlogix forecasts.

 

In pit trades, UBS Securities bought 200 March and RJ O'Brien bought 300 March. ADM Investor Services, Fortis and Rand Financial each sold 300 March, Man Financial and JP Morgan each sold 400 March. Speculative fund selling was estimated at 2,000 contracts.

 

Day session volume on the e-CBOT platform was 32,233 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended lower across the board, retreating in step with soybeans on pre-weekend trade consolidation. Soyoil futures fell to 5-week lows, pressured by liquidation pressure heading into the holidays.

 

Soymeal stumbled lower, succumbing to technical pressure, with prices sinking to the lower end of the market's current trading range. Prices were firmly planted in negative territory, as selling accelerated once the nearby January contract breached support at its 50-day moving average of US$188.60 per short tonne, traders said.

 

January oil share ended at 42.98% and the January crush ended at 63 cents.

 

In soymeal trades, buyers were lightly scattered among various firms. On the sell side, Calyon Financial sold 300 January and 200 March, Man Financial sold 300 January, with Term Commodities and Fimat each selling 200 March. Speculative fund selling was estimated at 1,000 lots.

 

In soyoil trades, buyers were widely scattered with JP Morgan buying 300 January and 200 March. ADM Investor Services, Fimat and Man Financial each sold 200 March, and Rand Financial sold 300 March. Speculative fund sales were estimated at 1,000 lots.