March 3, 2006

 

CBOT Soy Review on Thursday: Up on spec buying, EU meal-buying rumor

 

 

CBOT soybeans and soy products ended higher Thursday after aggressive speculative buying was seen at key moving averages, brokers said.

 

Soymeal led early on talk of possible European soymeal buying and technical buying, while CBOT soyoil staged a technical breakout to surge to a 4-1/2 month high despite Thursday's Census Bureau's report of the highest monthly U.S. soyoil stocks (2.467 billion pounds at the end of January) since August 2002.

 

"Today's rally was a big surprise," one CBOT broker said. "The European cash meal business isn't confirmed, but (EU meal) prices traded down near the fall lows and held."

 

CBOT May soybeans ended up 14 1/2 cents at US$6.05 1/2 a bushel, after topping its 10-, 20-, 100- and 50-day moving averages, respectively.

 

CBOT May soymeal closed up US$3.50 at US$178.10 per short tonne after falling to the lowest level since Nov. 29 early. Overhead resistance held at the 10-day moving average of US$179.40 per tonne.

 

May soyoil settled up 0.60 cent at 24.75 cents per pound after soaring to a 4-1/2 month high of 24.80 cents.

 

In Wednesday's soybean pit trades, ABN Amro bought a net 1,800 May, Fimat bought at least 1,000 May, Refco Inc. bought 800 May, JP Morgan bought a net 300 July, brokers said.

 

In spread trade, Rand Financial spread 1,000 November/July, they said.

 

Weekly U.S. soybean export sales matched expectations, but were "nothing to write home about," said John Kleist, of Kleist Ag Consulting.

 

U.S. soybean export sales for 2005-06 marketing year for the week ended Feb. 23 totaled 367,400 tonnes while new-crop sales totaled 185,000 tonnes, according to the U.S. Department of Agriculture.

 

U.S. soymeal export sales for the 2005-06 marketing year totaled 91,900 tonnes, while 500 tonnes of 2006-07 U.S. soymeal were sold, the USDA said.

 

U.S. weekly soyoil sales for the 2005-06 year were 400 metric tonnes, the government said.

 

The rally took place amid forecasts for record U.S. soybean supplies as of Aug. 31 and the ramping up of South America's soy harvest and key marketing season.

 

In Brazil, lingering rains were expected in parts of top producer Mato Grosso until March 15, ClimaTempo weather service forecast Wednesday. The forecast spurred concerns that wet weather could damage soybean quality, traders noted.

 

Agronomists from Brazil's National Commodities Supply Corp., or Conab, will release on March 20 data from their review of the 2005-06 harvest from March 5 to March 11, Conab said Thursday.

 

In neighboring Argentina, the 2005-06 soybean crop was said to be evolving well thanks to a downpour of fresh rain this week, climatologists said.

 

Moreover, lingering concerns about a drop in global soybean consumption amid the spread of a deadly bird flu strain were mostly ignored Thursday, CBOT brokers said.

 

Midday U.S. soybean barge basis bids for the first half of March were unchanged Thursday, cash sources said.

 

There were 2,146 deliveries posted on Thursday against CBOT March soybeans, with Term Commodities stopping 955 lots, brokers said.

 

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

 

There were 764 deliveries posted Thursday against CBOT March soyoil, with Bunge Chicago stopping 265 lots and Term Commodities stopping 499 lots. No soymeal deliveries were posted Thursday.

 

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

 

CBOT South American soybean futures also ended higher Thursday. The CBOT SAS May futures settled up 13 cents at US$6.28 per bushel.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended higher, with the nearby five contracts up US$3.10 to US$3.80 per tonne.

 

In CBOT soymeal trades, Fimat Futures bought about 1,500 May, commercial ADM bought about 200 July, the commercial arm of JP Morgan sold 400 May and Kottke Grain bought 300 May, brokers said.

 

CBOT May oil share ended Thursday at 41%, and the May crush was at 60 cents.

 

Soyoil futures closed higher, with the nearby five CBOT soyoil contracts up 0.55 cent to 0.60 cent per pound.

 

Soyoil has recently benefited from fears of a cut in U.S. soybean crush amid the spread of bird flu and talk of increased U.S. biodiesel production, but Thursday's rally was especially impressive as it bucked bearish Census stocks data, brokers said.

 

Overbought conditions were noted in CBOT May soyoil, with the nine-day relative strength index at 78, above the 70 level normally considered indicative of overbought levels.

 

In Thursday's CBOT soyoil trades, funds bought at least 4,000 lots, traders said. Calyon Financial bought 900 May and 400 July, Prudential Financial bought 600 May, R.J. O'Brien bought 700 May, Iowa Grain bought 400 May, Citigroup sold 700 May and Tenco Inc. sold 600 May.

 

CBOT soyoil spread trade was quiet, brokers noted.