February 9, 2006

 

CBOT Soy Outlook on Thursday: Steady-weak; bearish USDA data vs funds

 

 

Soybean futures at the Chicago Board of Trade were called to open steady to down 3 cents Thursday, with bearish U.S. Department of Agriculture domestic and global ending stocks data offset by hopes for fund buying, firm overnight soybean trade and talk that China was buying U.S. soybeans, brokers said.

 

"It's all going to depend on what the funds want to do on the open," one CBOT broker said after the USDA data were released, with several other traders echoing that sentiment.

 

Bullish overnight news for CBOT soybean futures included a steady-up 3 cent e-cbot trend, talk that China has been buying U.S. soybeans, a weaker dollar Thursday and gains in precious metal futures, they said.

 

The USDA Thursday raised its forecast for 2005-06 U.S. soybean ending stocks to a record 555 million bushels due to weaker-than-expected export sales.

 

The previous soybean ending stocks record was 536 million bushels, set in 1985-86. In January, the USDA forecast 2005-06 U.S. soybean ending stocks of 505 million bushels.

 

If the new USDA carryout forecast comes true, 2005-06 ending stocks would be more than double the 2004-05 carryout of 256 million bushels, analysts noted.

 

The USDA also lowered its U.S. 2005-06 soybean export forecast to 910 million bushels, a 40-million-bushel drop from the 950 million that the USDA said it was expecting a month ago.

 

The 2005-06 world soybean ending stocks tally was put at 53.83 million metric tonnes, up from the January estimate of 53.15 million tonnes.

 

In overnight screen trade, the e-cbot March soybean contract settled up 3 1/2 cents at $5.81 1/2 a bushel. March soymeal ended down 10 cents a short tonne at $180.10, and March soyoil closed up 0.16 cent at 22.31 cents a pound.

 

U.S. Midwest cash soybean basis bids were mixed early Thursday, cash dealers said. Spot cash soybean bids were down flat in St. Louis, steady in Cedar Rapids, Iowa, Chicago and Decatur, Indiana, they noted.

 

The USDA on Thursday reported U.S. soybean export sales for the week ended Feb. 2 totaled 518,200 metric tonnes, above traders' estimates of 250,000 to 450,000 tonnes.

 

Soymeal weekly export sales totaled 133,300 tonnes, above estimates; while soyoil sales were 6,000 tonnes, matching estimates.

 

At the Dalian Commodity Exchange, soybean futures settled mixed Thursday ahead of the USDA report, brokers said.

 

The benchmark May 2006 soybean contract settled RMB3 higher at RMB2,644 a metric tonne; May 2006 soymeal contract settled down RMB2 at RMB2,285/tonne; and September 2006 soyoil contract fell RMB5 to settle at RMB5,071/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended sharply higher ahead of USDA data and on improved demand for palm oil products in the cash market, brokers said. The benchmark April CPO contract ended at MYR1,464 a metric tonne, up MYR20 from Wednesday after moving between MYR1,444 and MYR1,464.

 

In Rotterdam, spot soybean and soymeal prices were higher, cash sources said.