February 22, 2006

 

CBOT Soy Review on Tuesday: Weak on Argentina rain outlooks, bird flu

 

 

Chicago Board of Trade soybean and soy product futures ended lower Tuesday on technical sales as Friday's gains were deemed "overdone," on forecasts for rains in Argentina's soy belt this week and on worries about the spread of deadly bird flu in Europe, brokers said.

 

CBOT May soybeans ended down 13 1/2 cents at US$6.01 a bushel, above its key 100-day moving average of US$5.98 1/2.

 

CBOT May soymeal ended down US$5.00 at US$182.20 a tonne, and May soyoil closed down 22 points at 23.49 cents a pound.

 

Rolling of nearby CBOT March soybean and soyoil contracts was noted ahead of the Feb. 28 first notice day for the CBOT March delivery cycle.

 

There were 1,903 soybean contracts registered with the exchange for delivery purposes as of Friday. There were 5,379 soyoil registrations and 34 soymeal registrations.

 

CBOT registrations are updated daily at 4 p.m. CST.

 

In Tuesday's soybean pit trades, commercials were net sellers and commodity funds sold at least 3,500 contracts. Bunge Grain sold 600 July, FC Stonnee sold 500 May, Calyon Financial sold 1,100 May, Man Financial bought 700 May and Tenco Inc. bought 500 may, brokers said.

 

In spread trade, Man Financial, R.J. O'Brien, SA Trading and ABN Amro each spread 300 March/May, they said.

 

In soybean options trade, ADM bought 2,500 May US$5.80 calls, 2,500 May US$5.60 calls and 1,000 May US$6.00 calls, brokers said.

 

The U.S. Department of Agriculture reported Tuesday weekly U.S. soybean export inspections totaled 27.359 million bushels. The tally was at the low end of traders' estimates and lagged last week's 34.240 million; however, the figure included 16.556 million bushels destined for China.

 

Midday spot U.S. soybean barge basis bids ticked up 7 cents Tuesday, cash sources said.

 

CBOT South American soybean futures ended lower Tuesday. The CBOT May futures settled down 14 cents at US$6.16 per bushel.

 

Weather forecasts in Argentina called for much-needed thunderstorms beginning Wednesday after hot, dry conditions early this week, Meteorlogix weather service said early Tuesday.

 

In Brazil, forecasts called for scattered showers and little stressful heat, according to Meteorlogix weather service.

 

Brazilian agriculture market consulting firm AgRural said on Monday that Brazil's 2005-06 soy harvest should total 56.2 million metric tonnes, 2.3% less than its January estimate and 3.2% less than their first crop estimate in August.

 

Regional dry weather problems in soy producing states like Parana, Mato Grosso do Sul and Bahia were the principal reason for the reduction, an analyst said.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended lower Tuesday on speculative sales and concerns about diminished consumption as the deadly bird flu virus spread into Europe. The nearby five contracts ended down US$4.10 to US$5.10 per tonne.

 

In soymeal trades, commodity funds sold at least 2,600 lots while commercials traded both sides lightly, brokers said.

 

R.J. O'Brien sold 1,000 May and bought 300 March, Iowa Grain sold 600 May and Man Financial sold a net 400 May.

 

In spread trade, Man Financial and Iowa Grain each spread 300 March/May, brokers said.

 

CBOT May oil share ended at 39.20%, and the May crush was at 58 1/4 cents.

 

Soyoil futures closed as speculative sales and losses in neighboring soybeans outweighed commercial buying, brokers said. The nearby five CBOT soyoil contracts closed Tuesday down 0.19 to 0.28 cent per pound.

 

In Tuesday's soyoil trades, commercials bought at least 2,500 lots while funds sold about 1,800 lots, brokers said.

 

ADM bought 600 May, JP Morgan bought 400 May, Fimat bought 500 May, O'Connor and Co. sold 500 May, R.J. O'Brien sold 400 May and Term Commodities sold 300 May and 300 July, they noted.

 

In spread trade, R.J. O'Brien spread 1,000 March/May, Man Financial spread 400 March/May and Citigroup spread 400 May/March, brokers said.