February 9, 2007

 

CBOT Soy Review on Thursday: Ends up on exports, ahead of USDA report

 

 

Chicago Board of Trade soybean futures ended slightly higher Thursday, with support from solid export sales and positioning ahead of the release of new U.S. carryout estimates on Friday, sources said.

 

Expectations that U.S. producers will plant millions of acres of corn instead of soybeans this spring also continued to lend support, analysts added.

 

March soybeans finished 2 3/4 cents higher at US$7.43 3/4 per bushel, while May soybeans closed 3 cents up at US$7.60 1/4. March soymeal closed US$1.60 up at US$215.30 per short tonne, and March soyoil settled flat at 30.43 cents per pound.

 

Trading during the day session focused largely on Friday's scheduled release of a U.S. Department of Agriculture supply and demand report, floor sources noted. Traders squared up some positions ahead of the report, which will include new estimates on U.S. soybean carryout and global soybean production, a source added.

 

Analysts are predicting the USDA will slightly lower its U.S. soybean carryout estimate because of strong U.S. export sales and a fairly aggressive crushing pace.

 

The USDA on Thursday released weekly export sales figures, which exceeded analysts' estimates and were seen as positive for prices.

 

For the week ended Feb. 1, U.S. soybean export sales totaled 803,200 metric tonnes, above analysts' estimates of 450,000 to 700,000 tonnes. The sales were 19% above the previous week and 8% over the prior four-week average, according to the USDA.

 

Major buyers included China, which took 333,100 tonnes; Mexico, which took 213,700 tonnes; and Turkey, which bought 100,000 tonnes.

 

"This is a couple weeks now that we've seen solid soybean sales," an analyst said. "China continues to be a big buyer."

 

Soybeans also felt strength from ongoing talk among traders about an expected U.S. acreage loss this spring, a floor broker added. Traders continue to consider estimates for the acreage shift from soybeans to corn and will probably continue to do so until they have a better idea of planting in March, he said.

 

In the neighboring markets, corn and wheat traded higher, and provided soybeans with additional upside momentum, the broker noted.

 

Looking ahead, market activity Friday will likely be determined by the USDA report, sources noted.

 

In pit trades, Fortis bought 500 March. Rand Financial bought 300 March and spread 800 November/July. ABN Amro, JP Morgan and ADM each spread 500 May/March. ADM also spread 700 March/May, while Iowa Grains spread 700 July/November.

 

Funds bought an estimated 500 contracts.

 

 

SOY PRODUCTS

 

CBOT soymeal futures closed higher with soybeans. Unwinding of the soyoil/soymeal spread and ideas that cold weather will increase feed usage remained supportive, a floor source said.

 

CBOT soyoil futures, meanwhile, ended flat after shaking off early losses from profit-taking and disappointment over weekly export sales, a trader noted. A turnaround in crude oil futures gave soyoil a boost, he said.

 

The USDA reported soymeal sales were 135,300 tonnes, while analysts had predicted sales of 75,000 to 200,000 tonnes. Soyoil sales totaled 2,900 tonnes, on the low ended of analysts' estimates of zero to 10,000 tonnes.

 

In pit trades, Tenco sold 1,000 March soymeal, and Prudential bought 400 March soyoil.

 

The May/March spread was popular in meal. Prudential spread 1,000, while JP Morgan, ABN Amro and RJ O'Brien each spread 500.

 

Funds bought an estimated 500 soymeal and sold an estimated 500 soyoil.