February 10, 2006
CBOT Soy Review on Thursday: Higher on fund buying; spreads noted
Chicago Board of Trade soybean and soy-product futures ended higher Thursday on speculative buying despite the U.S. Department of Agriculture's forecast for larger 2005-06 domestic and global soybean carryouts, brokers said.
Rolling of nearby CBOT March soybean contracts was featured on the third day of the Goldman roll, the five days when index positions are rolled to deferred months ahead of the CBOT March delivery cycle.
The March soybean contract ended up 9 3/4 cents at US$5.87 3/4 a bushel, just above the 10-day moving average of US$5.87. Overhead resistance was seen at the 50- and 100-day moving averages near US$5.91.
CBOT March soymeal ended up US$1.40 at US$181.60 a short tonne, and March soyoil closed up 50 points at 22.65 cents a pound.
In soybean pit trades, funds bought at least 4,000 contracts while commercials traded both sides of March, brokers said. ABN Amro bought 1,700 March while JP Morgan sold 2,000 July. R.J. O'Brien and Rand Financial were also net buyers of March.
In spread trade, Fimat Futures spread 2,100 May/March and Iowa Grain, Calyon Financial and R.J. O'Brien each spread 700 May/March, brokers said.
In Thursday's monthly crop report, the USDA boosted its forecast for 2005-06 U.S. soybean ending stocks to a record 555 million bushels due to weaker-than-expected U.S. soybean export sales.
The previous soybean ending stocks record of 536 million bushels was 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 on Thursday 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.
The USDA on Thursday reported U.S. soybean export sales for the week ended Feb. 2 totaled 518,200 tonnes, above traders' estimates of 250,000 to 450,000 tonnes.
U.S. soymeal weekly export sales totaled 133,300 tonnes, above estimates; while U.S. weekly soyoil sales were 6,000 tonnes, matching estimates.
CBOT South American soybean futures also ended higher Thursday. The CBOT March futures settled up 9 cents at US$6.22 per bushel.
U.S. soy traders continued to eye South American weather forecasts and early soy harvest reports from Mato Grosso, Brazil.
SOY PRODUCTS
The USDA on Thursday lowered its 2005-06 U.S. soy crush estimate to 1.72 billion bushels from 1.73 billion and cut its end soyoil stocks forecast to 2.454 billion pounds from 2.469 billion.
Soymeal futures ended higher Thursday on speculative buying, with the nearby five contracts up US$1.10 to US$2.20 per tonne.
In soymeal trades, funds bought at least 2,000 lots. The Refco division of Man Financial bought 1,200 March, while Citigroup, Goldenberg Hehmeyer and ABN Amro each sold about 200 March. Commercial Bunge Grain traded both sides of March and May while FC Stonnee sold 100 March.
In spread trade, the Refco division of Man Financial, Term Commodities and ABN each spread July/May while FC Stonnee spread 500 March/July and Fimat spread 500 August/July, brokers said.
CBOT March oil share ended at 38.41%, and the March crush was at 61 cents.
Soyoil futures closed higher Thursday on fund buying and following a sharply higher close in rival Malaysian palm oil futures. The nearby five CBOT soyoil contracts closed up 0.50 to 0.53 cent per pound.
In soyoil trades, fund buying of more than 2,000 contracts offset commercial sales. Calyon Financial, Man Financial and O'Connor and Co. were featured buyers of March while JP Morgan sold 500 March and ADM sold 400 May, brokers said.
In soyoil spread trade, Fimat Futures spread 500 March/May, brokers said.
