February 8, 2006
CBOT Soy Outlook on Wednesday: Down 2-4 cents on e-CBOT, overseas markets
Soybean futures at the Chicago Board of Trade were called to open down 2-4 cents per bushel Wednesday following weak overnight e-cbot trade and lower overseas prices, brokers said.
"We triggered heavy rolling from March contracts yesterday on the first day of the Goldman roll," noted John Kleist, of Kleist Ag Consulting. "In a normal market, even though we're anticipating bearish USDA news tomorrow, we'd look for early (CBOT soy) losses today and then consolidate."
Analysts have estimated the U.S. Department of Agriculture will report Thursday U.S. 2005-06 soybean ending stocks at 527 million bushels, just below the U.S. record carryover of 536 million bushels set in 1985-86.
The USDA on Jan. 12 forecast 2005-06 U.S. soybean ending stocks at 505 million bushels; U.S. soybean ending stocks in 2004-05 totaled 256 million bushels.
"We'll also watch outside markets to see if they have any influence today," a CBOT trader said.
Gold futures were lower early Wednesday in a continued correction in a bear market, sources noted.
In overnight screen trade, the e-cbot March soybean contract settled down 1 3/4 cents at $5.72 1/4 a bushel. March soymeal ended up 30 cents a short tonne at $177.00, and March soyoil closed down 0.18 cent at 22.10 cents a pound.
At China's Dalian Commodity Exchange, soybean futures settled sharply lower Wednesday on long liquidation and following losses in other commodity markets, analysts said.
Lingering bird flu concerns weighed on prices, but prices were already high enough given the supply situation, an analyst said.
China reported a new bird flu case in Shanxi province Tuesday night, after 15,000 fowl were found dead from Feb. 2-3. So far, more than 187,000 birds have been culled in the area.
The benchmark DCE May 2006 soybean contract settled RMB89 lower at RMB2,641, while the benchmark September 2006 soyoil contract fell RMB78 to settle at RMB5,076/tonne.
The benchmark May 2006 soymeal contract fell RMB79 to settle at RMB2,287/tonne. It hit limit-down in the afternoon session and ended at RMB2,272/tonne.
"Chinese soy futures don't always react to bird flu news," Kleist noted. "Sometimes they just shrug off the news."
In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended lower following losses in CBOT soyoil, sources said. The benchmark April CPO contract ended at MYR1,444 a metric tonne, down MYR5 from Tuesday. It traded in a narrow range of MYR1,442-MYR1,448 during the day.
In Rotterdam, spot soybean and soymeal prices were lower Wednesday, cash sources said.
U.S. Midwest cash soybean basis bids were narrowly mixed early Wednesday, cash dealers said. Spot cash soybean bids were down 1 cent in St. Louis, and unchanged in Sioux City, Iowa, and Decatur, Indiana, they noted.
In overnight soy export news, Seoul-based Korea Feed Association sought up to 165,000 metric tonnes of U.S. or South American soymeal in a buy tender to be held at 0700 GMT Thursday, a KFA official said Wednesday.
U.S. soy traders continued to eye South American weather forecasts and early soy harvest reports from Brazil.
Near-term forecasts called for scattered showers in Brazil's soy growing areas, according to Meteorlogix weather service.
Soy growing conditions were expected to be more favorable in Argentina following recent rains, Meteorlogix said.
Meanwhile, registrations of 2006-07 Brazilian soybean exports totaled 18% of the estimated 57.4 million-metric-tonne harvest, compared with 8.1% of the estimated 52.6 million-tonne crop in 2005-06, according to the Brazilian Vegetable Oils Industry Association, or Abiove.
The tally through Jan. 31 also continued to show a significant drop from the 8 million tonnes seen at the same point in the 2004-05 season, when favorable international soy prices, high Chinese demand and a favorable exchange rate between the Brazilian real and the U.S. dollar contributed to the soy export market, sources noted.
