March 7, 2006

 

CBOT Soy Review on Monday: Ends weak on spec sales, bird flu fears

 

 

CBOT soybean and soy product futures ended lower Monday on speculative sales and fears of slowing global soymeal demand amid the spread of avian flu in Europe and Asia, brokers said.

 

Losses were pared after Argentina said at midday that the deaths of about 500 wild birds there weren't due to a deadly strain of bird flu. The statement eased traders' worries that the disease had made its way into the Western Hemisphere, they added.

 

Forecasts for U.S. Midwest rains this week were also considered to be bearish, brokers said. The rains are expected to replenish U.S. soils ahead of spring plantings.

 

CBOT May soybeans ended down 5 1/2 cents at US$6.00 1/2 a bushel.

 

CBOT May soymeal futures ended down US$1.50 at US$175.90 and CBOT May soyoil closed down 0.12 cent at 24.79 cents per pound.

 

In Monday's soybean pit trades, commodity funds sold at least 2,200 lots, brokers said.

 

ABN Amro sold 800 May, R.J. O'Brien sold 600 May, Kottke Trading sold 500 May, Man Financial bought 800 May, the commercial arm of JP Morgan bought 500 May and Term Commodities bought 1,000 May, they added.

 

Term Commodities spread 200 May/July while Produce Grain, R.J. O'Brien and FC Stonnee each spread 200 November/July, brokers 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, up from the previous day's 6,233, and 34 soymeal registrations, unchanged from Thursday.

 

CBOT soy losses were limited slightly by news reports Monday stemming from top U.S. soy customer China that it had switched purchases of up to six cargoes to the U.S. from Brazil due to loading problems there, brokers said.

 

The U.S. Department of Agriculture reported Monday that weekly U.S. soybean export inspections totaled 25.562 million bushels, at the high end of traders' estimates and above the previous week's 21.159 million bushels. Of the weekly tally, 10.513 million bushels of U.S. soybeans were destined for China, the USDA reported.

 

Midday U.S. soybean barge basis bids for the first half of March were unchanged, while bids for the last half March fell 4 cents per bushel Monday, cash sources said.

 

CBOT soy traders noted news that about 20% of Brazil's soy harvest had been gathered. However, forecasts for widespread rains this week in Mato Grosso pointed to harvest delays, they added.

 

Brazilian agribusiness consulting firm Celeres lowered its estimate for the 2005-06 soy crop Monday by 0.5% to 57.5 million metric tonnes, while traders noted the USDA would release its latest Brazilian soy crop forecast Friday.

 

In Argentina, light rains were expected to develop late Tuesday and linger through Wednesday in key soy-growing regions, Meteorlogix said.

 

CBOT South American soybean futures ended lower Monday. The CBOT SAS May futures settled down 6 cents at US$6.20 per bushel.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended lower Monday, with the nearby five contracts down US$1.20 to US$2.00 per tonne.

 

In CBOT soymeal trades, funds sold about 1,500 lots by 12:30 CST, but speculative buying was then noted after Argentina reported the wild bird deaths were not related to a deadly strain of bird flu.

 

Citigroup sold 1,000 July, Iowa Grain bought 700 May and the commercial arm of JP Morgan bought 500 July, brokers said.

 

CBOT May oil share ended Monday at 41.34%, and the May crush was at 59 1/4 cents.

 

Soyoil futures also closed lower, with the nearby five CBOT soyoil contracts down 0.10 cent to 0.12 cent per pound in a slight setback from last week's 4-1/2-month high.

 

Still, losses in soyoil futures were limited by fears of a cut in U.S. soybean crush amid the spread of bird flu and talk of increased U.S. biodiesel production, brokers said.

 

In Monday's CBOT soyoil trades, commodity funds were light net buyers. UBS bought 800 July and 200 May, Rand Financial sold a net 800 May and bought 200 July, O'Connor and Co. bought 600 May, ABN Amro bought a net 200 May and commercial Bunge Grain sold 300 May, brokers said.

 

In CBOT soyoil spread trade, FC Stonnee spread 400 March/July, ADM Investor Services spread 300 March/May and O'Connor and Co. spread 300 July/May, they noted.