February 16, 2006

 

CBOT Soy Outlook on Thursday: Near steady; sales in line with estimates

 

 

Soybean futures on the Chicago Board of Trade are expected to open mostly steady on weekly export sales that were as-expected and on steady to slightly weaker prices overnight, sources said Thursday.

 

On the e-CBOT platform overnight, most-active May soybeans were down 1/2 cent to US$5.98 1/2 and March beans also were down 1/2 cent to US$5.86 1/2. May soymeal was unchanged at US$184.40 a short tonne and May soyoil was up 1 point to 22.68 cents a pound.

 

Export sales for the week to Feb. 9, were a net 529,600 metric tonnes in the 2005-06 marketing year, with 100,000 tonnes of 2006-07 soybeans sold, the U.S. Department of Agriculture said Thursday. This is in line with trade expectations for sales of 400,000-600,000 tonnes.

 

China was the best customer, buying 360,300 tonnes, including 220,000 tonnes that were switched from unknown destinations, the USDA said.

 

Total exports were pegged at 988,200 tonnes, up 47% from the previous week and 48% higher than the prior four-week average. China was the primary destination at 531,300 tonnes.

 

Since export sales were within the range of expectations, the futures market is expected to see a mostly steady open, said Dale Gustafson, analyst at Citigroup Global Markets in Chicago.

 

While there are some concerns in the market over dryness in South America, Gustafson said the problem isn't nearly as bad as what was seen last year.

 

Brazil's Mato Grosso and Mato Grosso do Sul saw scattered to widely scattered rains with 0.20-0.75 inch during the last 24 hours. Scattered showers are expected to continue through next Monday, according to DTN Meteorlogix.

 

Further south, in Parana and Rio Grande do Sul, scattered showers of 0.20-0.75 inch rain amounts were seen, with scattered showers forecast to continue Thursday. Mostly dry conditions are expected to set it by Thursday and continue through the weekend in Rio Grande do Sul, with scattered showers possible. Thundershowers are forecast for northern Parana Saturday through Monday.

 

In Argentina, no significant rains are expected over the next five to seven days and high temperatures will range from the high 90s to 100 Fahrenheit, which will stress the soy crops. Long-range charts show a cold front moving in later Wednesday or Thursday.

 

Traders will be eyeing news out of the USDA's annual Agricultural Outlook Forum that began Thursday. USDA Chief Economist Keith Collins said U.S. farmers are expected to plant 2 million more acres of soybeans than they did last year, bringing total soy acres to 74 million for the 2006-07 season. High CBOT prices, despite large supplies, were cited for the increase in plantings.

 

Soybean prices in Rotterdam were mostly higher Thursday afternoon.

 

Soybean futures on China's Dalian Commodity Exchange ended mixed in thin, lackluster trade. In fact, the soybean market hasn't seen any active trade this week as participants are focused on other commodity markets.

 

The benchmark September 2006 contract settled RMB4 lower at RMB2,727 a tonne.

 

 

SOY PRODUCTS

 

Soy product markets are also called to open near steady following the lead of soybeans.

 

Export sales for 2005-06 soymeal were a net 152,900 tonnes, higher than most expectations centering on sales of 75,000-125,000 tonnes. In addition, 100,000 tonnes of 2006-07 meal was sold, the USDA said.

 

Soyoil export sales for 2005-06 were a negative 3,300 tonnes, while 2006-07 sales totaled 5,400 tonnes, which were switched from 2005-06 sales to Mexico.

 

Malaysian crude palm oil futures on the Bursa Malaysia Derivatives exchange closed slightly higher in choppy trade, as market sentiment remained positive on expectations for bullish prices forecasts at an industry conference next week, Dow Jones reported. The benchmark May contract settled at MYR1,489 a tonne, up MYR1 from Wednesday.