March 9, 2007

 

CBOT Soy Review on Thursday: Closes up amid positioning before report

 

 

Chicago Board of Trade soybean futures closed slightly higher Thursday amid fund buying and position squaring before the release of a new government supply and demand report, traders and analysts said.

 

May soybeans ended up 1 3/4 cents at US$7.59 per bushel, and November soybeans finished 2 1/4 cents higher at US$7.97 1/2. May soymeal closed US$1.50 lower at US$221.10 per short tonne, and May soyoil closed 39 points up at 30.60 cents per pound.

 

Funds bought an estimated 3,000 soybean contracts, traders said.

 

Floor activity was largely subdued during the day session as traders bided their time before the U.S. Department of Agriculture releases its March supply and demand report at 8:30 a.m. EST (1330 GMT) Friday, traders said.

 

The USDA is expected to lower its U.S. soybean ending stocks estimate in the report because of a strong export and crush pace, analysts said. A Dow Jones Newswires survey of 15 analysts showed the average estimate carryout was 589 million bushels, down slightly from the USDA's February estimate of 595 million bushels.

 

The USDA also might increase its estimates for South American soybean production based on favorable growing conditions and early reports of high yields, the analysts said.

 

Looking ahead, Phil Storer, analyst at Dillon Gage, said a large South American crop and hefty U.S. ending stocks would be bearish for soybeans in the near term.

 

"I don't see much of anything to get excited about on the soybeans," he said. "It looks like Brazil is putting down a crop that you can't believe. I think they plan to feed the world on their own.

 

"I don't hold high hopes for anything but lower prices at least initially," he continued. "It just appears that there are, and going to be, a lot of soybeans out there."

 

Brazil's census and statistical bureau, IBGE, raised the country's 2006-07 soy crop output by 0.5% this month to a total 56.6 million metric tonnes Thursday. IBGE cited better-than-expected output in Parana. Production rose 2.2% from IBGE's estimate last month to 12.1 million tonnes. Parana is the No. 2 soy producing state behind Mato Grosso in the center-west region.

 

In other news, weekly U.S. soybean export sales were within trade expectations. The USDA reported sales for the week ended March 1 were 566,000 metric tonnes, within analysts' estimates that sales would be 250,000 to 600,000 tonnes.

 

The sales were 36% above the previous week and 3% above the prior four-week average. The biggest buyers were China, which took 235,100 tonnes, and Japan, which bought 117,300 tonnes.

 

CBOT May soybeans ended off their session of US$7.65 1/2, and November soybeans trimmed gains for a session high of US$8.03. There was some pressure from late weakness in nearby CBOT corn futures, a floor trader said.

 

In pit trades, JP Morgan bought 500 May, while Fimat and UBS each bought 400 May. Rand Financial sold 500 May.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended mixed amid light fund buying support for soyoil. Funds bought an estimated 2,000 soyoil and sold an estimated 1,000 soymeal.

 

Weekly U.S. soyoil export sales also came in above trade expectations, an analyst noted. The USDA reported soyoil sales for the week ended March 1 totaled 8,000 tonnes, while analysts had estimated sales would be none to 5,000 tonnes.

 

Soymeal sales, meanwhile, were 66,100 tonnes, within analysts' estimates of 25,000 to 100,000 tonnes.

 

In soymeal pit trades, Iowa Grains sold 1,000 May, and Bunge bought 500 May. In soyoil activity, ADM bought 700 May, and JP Morgan bought 600 May. Bunge sold 500 May, while Goldenberg Hehmeyer sold 400 May and Tenco sold 400 July.