January 6, 2006

 

CBOT Soy Outlook on Friday: Seen up 1-3 cents on overnight gains

  

 

Soy complex futures at the Chicago Board of Trade are expected to open steady to firmer, following overnight strength.

 

Most-active March soybeans were called to open 1 to 3 cents a bushel firmer.

 

March soybeans in e-CBOT trade were up 3 cents at US$6.21 1/2 a bushel. March soymeal was up US$1.40 at US$192.70 a short tonne and March soyoil was down 2 points at 23.19 cents a pound.

 

Export sales from the U.S. Department of Agriculture were 461,500 metric tonnes versus estimates of 450,000 to 650,000 tonnes. These sales were 48% below the previous week and 40% under the prior 4-week average. The primary buyers were the Netherlands, which bought 127,700 tonnes, including 60,000 tonnes switched from Germany and 60,000 tonnes from unknown destinations and China, which bought 118,200 tonnes. Decreases of 56,700 tonnes were reported for Germany.

 

Soymeal sales were 46,200 compared to estimates of 75,000 to 125,000 tonnes. Net sales of 46,200 tonnes were a marketing-year low and were 43% below the week earlier and 67% under the prior 4-week average. The major buyers were Colombia, Turkey, Australia, and Panama. Soyoil sales came in at 600 while trade guesses were 4,000 to 9,000 tonnes.

 

These sales do include the holiday week, so they might be lighter than normal, analysts said. "Buyers backed off ahead of the New Year," said John Kleist of John W Kleist Ag Consulting.

 

Kleist added that part of Thursday's break was in anticipation of weak export sales. "Well, they got it. This market is still very much in a technical phase," he said.

 

Soybean deliveries against the January contract were 463 contracts. Major issuers included Banc of America Securities LLC, which issued 200 contracts and E.M. Combs & Son, a Division of Cunningham, which issued 137 contracts. O'Connor was the major stopper at 259.

 

Soyoil deliveries totaled 1,536. Major issuers included the Century Group, a division of Man Financial, which issued 465. O'Connor issued 340 and LBS Limited Partnership, a division of Man Financial issued 208. Stoppers include the Century Group, which stopped 434, Prudential which stopped 140, LBS Limited Partnership, a division of Man Financial, which stopped 282 contracts.

 

There is some talk of a changing weather pattern for South America. Traders said while near-term forecasts for Argentina remain hot and dry, long-range forecasts are suggesting some possible rain. That could lend some bearishness to trade.

 

Crude palm oil futures on the Bursa Malaysia Derivatives were mixed in quiet trade. March ended at MYR1,433 a metric tonne, down MYR2.

 

Soybean futures on China's Dalian Commodity Exchange fall on CBOT losses, while soymeal remained attractive to speculative buyers, analysts said. May soybeans dropped RMB18 to RMB2,767 a metric tonne.

 

Domestic cash prices are firmer in China, but farmers aren't willing sellers, hoping for higher prices as soymeal prices rise due to the lack of fresh bird flu cases.

 

Rotterdam soybean and soymeal prices were weaker. European vegoils were mostly steady to weaker.