January 26, 2006
CBOT Soy Outlook on Thursday: Mixed start after weak crush, sales
A mixed start is expected for soy complex futures trade Thursday at the Chicago Board of Trade, as bearish fundamental news conflicts with overnight strength.
Most-active March soybeans were up 2 cents at $5.69 a bushel in e-CBOT trade. March soymeal was up $1 at $179.40 a short tonne and soyoil was up 3 points at 21.55 cents a pound.
Analysts said it appears a mild technical bounce lifted soybeans overnight, but whether this is enough to sustain soybeans with a disappointing crush and export sales remains to be seen.
"It's conceivable we could start steady to higher, but then fade into the sunset," one longtime analyst said. "The funds do strange things all the time" and don't follow fundamentals.
The Census Bureau reported the December soybean crush was 148.0 million bushels, with oil stocks at 2.189 billion pounds and meal stocks at 338,845 short tonnes. Trader expectations for the crush were 149 million bushels. Expectations for soyoil stocks were 2.053 billion pounds, and meal stocks were seen at 301,700 tonnes.
The U.S. Department of Agriculture's weekly export sales were 521,900 metric tonnes, 59% below the previous week and 32% under the prior four-week average. Major buyers include China, in for 217,400 tonnes, including 110,000 tonnes switched from unknown destinations and Japan, buying 82,500 tonnes, including 26,000 tonnes switched from unknown destinations. Sales were partially offset by decreases for unknown destinations at 32,000 tonnes.
Trader expectations ranged from 700,000 to 1 million tonnes.
Soymeal sales totaled 189,100 tonnes, 20% above the week earlier and 2 1/10 times the prior four-week average. Major increases came from El Salvador, which bought 59,700 tonnes and Cuba, buying 35,900 tonnes, which was reported late. Sales were partially offset by decreases for unknown destinations at 26,000 tonnes. Trader estimates ranged from 75,000 to 125,000 tonnes.
Soyoil sales of 4,400 tonnes were mainly for El Salvador, which bought 1,800 tonnes. Sales estimates ranged from zero to 1,000 tonnes.
John Kleist of Kleist Ag Consulting said while corn and wheat "have some legs" with supportive fundamentals of export sales and worries of winterkill, respectively, soybeans aren't so lucky and that can limit gains.
DTN Meteorlogix said Argentina was mostly dry with normal temperatures and the forecast for Thursday through Monday calls for above normal temperatures and dryness. Further ahead, there is a chance for light to locally moderate showers during Tuesday into Wednesday, with temperatures normal. Beyond that, dryness resumes Thursday, with temperatures warming Friday.
In Brazil, some rains fell in northern Rio Grande do Sul, southern Mato Grosso do Sul and western and southern Sao Paulo. Hot temperatures were recorded in Goias, Sao Paulo, Minas Gerais and the eastern Mato Grosso region. The outlook for Rio Grande do Sul and Parana calls for scattered showers through northern Parana from Thursday through Saturday, but dry elsewhere. Temperatures are seen averaging near to below normal.
During Sunday through Tuesday, scattered showers will be mainly confined to northern and eastern Parana and temperatures near to below normal. For Mato Grosso and Mato Grosso do Sul there is a greater chance for scattered showers and thundershowers Thursday through Saturday, with temperatures normal. The weather firm says there are daily chances for scattered afternoon or overnight thundershowers during Sunday through Tuesday, with normal temperatures.
Modest gains were seen in crude palm oil futures on the Bursa Malaysia Derivatives Thursday in a late short covering flurry. Otherwise, trade was quiet ahead of the Lunar New Year's holidays next week. April rose MYR4 to MYR1,439 a metric tonne.
Long liquidation pressured China's Dalian Commodity Exchange soybean futures Thursday ahead of the weeklong holiday. May fell RMB11 a metric tonne to RMB2,674/tonne. Rotterdam soybean and soymeal prices were mostly weaker. European vegoils were mixed.
