March 6, 2006

 

CBOT Soy Outlook on Monday: Down 10-12 cents on weak e-CBOT

  

 

Soybean futures at the Chicago Board of Trade were called to open down 10-12 cents per bushel Monday following similar losses in overnight trade amid a building South American soybean harvest and lingering concerns about a possible slowdown in soymeal demand due to the spread of a deadly strain of bird flu, brokers said.

 

"I don't think there is anything new this morning that is behind the extent of the (overnight) break," one CBOT soy source said. "We've seen continued decent conditions over the weekend in South America and a bird flu case in Poland. But I think it (the break) was more due to a lack of bids in overnight trade."

 

In overnight screen trade, the e-cbot May soybean contract settled down 12 1/2 cents at US$5.93 1/2 a bushel. May soymeal ended down US$3.30 a short tonne at US$174.10, and May soyoil closed down 0.36 cent at 24.55 cents a pound.

 

CBOT May soybean prices are now in the upper portion of a choppy trading range on the daily bar chart, a technical source said. But it will take a close above resistance at the February high of US$6.17 to provide the bulls with better upside technical power and push prices out of the recent choppy trading range.

 

First resistance for CBOT May soybeans was seen at US$6.07 1/2 - last week's high - and then at US$6.11. First support was seen at US$6.00 and then at US$5.98 1/2 - Friday's low, he said.

 

There were 449 deliveries posted Monday against CBOT March soybeans, with a customer of Dowd Wescott stopping 121 lots and a customer of Man Financial stopping 111 lots, brokers said.

 

Soybean contracts registered with the CBOT for delivery purposes as of Friday afternoon fell 17 lots to 3,842 lots.

 

There were 101 deliveries posted Monday against CBOT March soyoil. No soymeal deliveries were posted Monday.

 

There were 6,343 soyoil registrations, unchanged from the previous day's 6,233, and 34 soymeal registrations, also unchanged from Thursday.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended Feb. 28 turned from net long to net short. They boosted their short stance by 8,841 lots to hold 59,472 short positions and cut their long holdings by 9,496 lots to hold 55,656 long positions.

 

For CBOT soybean futures and options combined, speculators were short 57,848 lots, up 7,450 contracts from the week before, and long 55,486 contracts, down 6,933 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended Feb. 28 cut their long positions, boosted their short holdings and turned net short. They decreased their long holdings by 2,445 lots to hold 17,825 long positions and boosted their short holdings by 13,420 lots to hold 33,197 short positions.

 

For CBOT soymeal futures and options combined, speculators were long 20,476 lots, down 658 contracts, and short 32,634 contracts, up 13,047 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended Feb. 28 remained net long, cutting short holdings by 5,344 lots to 19,983 lots and decreasing long holdings by 1,281 lots to 29,774 lots.

 

For CBOT soyoil futures and options combined, speculators also remained net long, decreasing short holdings by 4,532 lots to 20,381 contracts and cutting long holdings by 1,115 lots to 27,365 lots.

 

U.S. Midwest cash soybean basis bids were mostly steady to weak Monday except for gains in Atchinson, Kansas, and Mitchell, S.D., cash dealers said. Spot cash soybean bids were down 1 cent in Omaha and Council Bluffs, down 1 cent in Evansville, and down 3 cents in Cincinnati, they noted.

 

Overnight U.S. soy export news was quiet, sources said.

 

In global news, Poland identified its first two cases of the H5N1 strain of the bird flu virus, Polish Press Agency reported Monday.

 

At China's Dalian Commodity Exchange, soybean futures settled lower following losses in overnight CBOT trade, sources said.

 

The benchmark DCE September 2006 soybean contract settled RMB22 lower at RMB2,724 a metric tonne after a range-bound trading session.

 

Some speculators built up short positions after seeing prices dropping in after-hours trade on CBOT, expecting CBOT soybeans to fall when the market opens Monday, said Xu Yulan, an analyst with Yong'an Futures Co.

 

"On the whole, it's a boring market, without any fresh market-moving news," Xu said.

 

The benchmark DCE September 2006 soymeal contract fell RMB27 to RMB2,339/tonne; and the DCE September 2006 soyoil contract settled RMB48 lower at RMB5,259/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended lower on profit-taking and concerns about high stocks, brokers said. The benchmark May CPO contract ended at MYR1,474 a metric tonne, down MYR14 from Friday.

 

In Rotterdam, spot soybean prices were higher and soymeal prices were mixed Monday, cash sources said.