March 2, 2006

 

CBOT Soy Review on Wednesday: Lower on technical sales, bird flu fears

 

 

Chicago Board of Trade soybean futures settled lower Wednesday on technical sales and concerns about U.S. soy demand amid the global spread of a deadly strain of bird flu, brokers said.

 

Reports of the unusual death of 15 flamingoes in the Bahamas, the closest suspicious bird death case to the U.S. so far, and concerns about bird flu in Europe were notable Wednesday, they said.

 

"Negative markets propagate negative markets," one CBOT floor broker said. "The first thing we learn is the 'trend is your friend'."

 

The nearby nine CBOT soymeal contracts also ended lower Wednesday, but CBOT soyoil futures ended higher on worries about a possible U.S. soybean crush slowdown if bird flu lingers.

 

CBOT May soybean futures closed Wednesday down 3 cents at US$5.91 per bushel.

 

CBOT May soymeal settled Wednesday down US$1.50 at US$174.60 per tonne. CBOT May soyoil futures ended up 0.18 at 24.15 cents per pound.

 

In Wednesday's soybean pit trades, funds were net sellers of at least 2,500 lots, brokers said. Calyon Financial sold about 1,000 May; Calyon Financial sold 700 November; Refco Inc. sold 400 May; and Fimat Futures bought 500 November and sold 100 May, brokers said.

 

Commercials were noted buyers as CBOT soybeans dipped. ADM bought 300 May soybeans while Bunge Grain and FC Stonnee were light buyers of May and Term Commodities bought 100 July, they noted.

 

There were 2,557 deliveries posted on Wednesday against CBOT March soybeans without major stoppers, another indication of ample U.S. supplies, brokers said.

 

Soybean contracts registered with the CBOT for delivery purposes as of Tuesday afternoon were unchanged at 3,859 lots.

 

There were 2,076 deliveries posted Wednesday against CBOT March soyoil, with Bunge Chicago again the key stopper of 1,276 lots; no soymeal deliveries were posted Wednesday.

 

There were 6,233 soyoil registrations, up from the previous day's 6,101, and 34 soymeal registrations, unchanged from Monday.

 

In Wednesday's CBOT soybean spread trade, R.J. O'Brien spread 600 November/July, brokers said.

 

Midday U.S. soybean barge basis bids for the first half of March were not available Wednesday, cash sources said.

 

In demand news, top global soy importer China brought in 930,000 tonnes of soybeans between Feb. 1-20, COFCO Futures said. It revised its February import estimate to 1.3 million tonnes, down from a previous estimate of 1.5 million to 1.6 million tonnes.

 

In January, China imported 1.69 million metric tonnes of soybeans, down 8.9% on year, the General Administration of Customs said on its Web site last week, without providing any explanations for the change.

 

CBOT South American soybean futures also ended lower Wednesday. The CBOT SAS May futures settled down 3 cents at US$6.15 per bushel.

 

CBOT traders continued to eye harvest and marketing news from Brazil, which is forecast to be the top global soybean exporter for the first time this marketing year.

 

Registrations of Brazilian soybean exports for market year 2006-07 were 22% of the estimated 57.1 million metric tonne harvest, compared to 12.6% of the estimated 52.6 million soy crop in 2005-06, according to government figures released by the Brazilian Vegetable Oils Industry Association, or Abiove, on Wednesday.

 

In marketing year 2004-05, however, Brazil had already promised 50.2% of its 50,085 million-tonne soy harvest to world markets.

 

Meanwhile, the Brazilian real closed stronger against the U.S. dollar Wednesday, at a nearly 5-year high after an upgrade Tuesday to the country's long-term sovereign debt rating.

 

Oilseed analysts have worried that a stronger real could limit Brazilian farmer soy sales, resulting in a backup of supplies this summer and fall.

 

In neighboring Argentina, good rains this week aided the soy crop, climatologists said.

 

Most Argentine analysts say the country's 2006 soy output will likely total around 40 million tonnes. The USDA sees Argentina's 2005-06 soybean output at 40.5 million tonnes.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended mixed Wednesday, with the nearby nine contracts lower and bellwether May soymeal setting a fresh, nearly 3-month low of US$174.00 per tonne on demand concerns amid bird flu, brokers said. The nearby five contracts closed down US$1.10 to US$1.80 per tonne.

 

In CBOT soymeal trades, funds were light net sellers, brokers said. Man Financial sold 400 March and bought a net 100 May, Fimat sold a net 100 May while commercials ADM and Bunge Grain each bought 300 May, they said.

 

CBOT May oil share ended Wednesday at 40.88%, and the May crush was at 58 3/4 cents.

 

Soyoil futures closed higher, with the nearby five CBOT soyoil contracts up 0.18 cent to 0.27 cent per pound.

 

In global vegetable oil news, India on Wednesday raised its base import price for crude palm oil by US$11 to US$437 a metric tonne. It also raised the base import price for crude soybean oil by US$23 to US$524/tonne, according to a notice posted on the Finance Ministry's Web site.

 

In Wednesday's CBOT soyoil trades, funds were light net sellers while commercials were again net buyers, brokers said. Rand Financial sold 700 May, Tenco Inc. sold 500 May, Citigroup sold 500 May and JP Morgan sold 300 May. Calyon Financial bought 700 May while commercial Bunge Grain bought 600 May, they said.

 

CBOT soyoil spread trade was relatively quiet, brokers noted.