February 27, 2009

 

CBOT Soy Review on Thursday: Mostly lower on higher stock forecast

 

 

Chicago Board of Trade soybean futures ended mostly lower Thursday, pressured by outlooks for a sizable increase in new crop inventories and lingering economic uncertainties.

 

CBOT March soybeans dropped 8 3/4 cents to US$8.69 1/4, and May soybeans settled 11 1/2 cents lower at US$8.68 1/2. November soybeans settled unchanged at US$8.38.

 

May soymeal settled US$4.20 lower at US$263.20 per short tonne. May soyoil finished 27 points lower at 31.93 cents per pound.

 

The U.S. Department of Agriculture's higher projection for 2009 acreage and ending stocks was a bearish influence on prices. Based off current demand, the market doesn't need the increase, so the larger planted area will boost 2009-10 ending supplies, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Lingering uncertainty surrounding economic influences added to the defensive tonnee, as traders remain cautious about taking on added risk exposure, analysts said.

 

The economy has a lot of baggage, so higher crude oil prices and firm stock indexes for most of the day failed to promote lasting upside momentum, Roose said.

 

Choppy activity was featured in early action, but with the economy in question, a jump in ending stock projections, and bearish weekly export sales and monthly crush data, buyers stayed on the run.

 

U.S. soybean planted area is expected to reach a record 77 million acres in 2009, up 1.3 million from last year, USDA Chief Economist Joe Glauber said Thursday at the annual Agricultural Outlook Forum.

 

The estimate is higher than the USDA's baseline projection, released Feb. 12. In the baseline report, the USDA had estimated 2009-10 soybean area at 74 million acres. The 2009 estimate is also slightly higher than last year, when farmers planted 75.7 million acres of soybeans with a production total of 2.95 billion bushels. Soybean ending stocks are projected to rise 81% to 380 million bushels in 2009, he said.

 

Deliveries against March soybean and soymeal contracts on first notice day Friday are expected to remain light amid firm cash values and tight supplies. Analysts point to large soyoil notices.

 

Analysts expect deliveries against the CBOT March soybean contract to fall in a range of zero to 200 lots, with most analysts leaning toward zero. Soymeal deliveries are seen between zero and 100 lots, while soyoil delivery notices are expected in a range of 2,000 to 4,000 contracts.

 

 

SOY PRODUCTS

 

Soy product futures ended lower, stumbling in unison with soybeans. Soyoil futures finished lower, but gained product share again on the continued adjustment in meal/oil spreads. Higher-than-expected January soyoil stocks reported by the Census Bureau added pressure to offset spillover support from higher crude oil prices, analysts said.

 

Soymeal prices dropped, receiving pressure from economic woes and sluggish domestic usage reflected by increased stocks in the Census crush report, traders said.

 

May oil share ended at 37.76%, up from Wednesday's close of 37.58%. The May crush ended at 61 3/4 cents.