March 10, 2006

  

CBOT Soy Outlook on Friday: Down 2-4 cents on USDA data, e-CBOT trade

  

 

Soybean futures at the Chicago Board of Trade were called to open down 2-4 cents per bushel Friday on bearish U.S. Department of Agriculture soybean ending stocks data and weak overnight trade amid a building South American soy harvest, improved U.S. soy plantings conditions and lingering global fears about the spread of bird flu, brokers said.

 

They also noted that key analyst Informa Economics forecast Friday 2006 U.S. soybean seedings at 75.222 million acres, above the U.S. Department of Agriculture's estimate of 74 million acres released at its Outlook Forum in February.

 

The estimates precede the USDA's scheduled release on March 31 of its first U.S. 2006 corn and soybean plantings forecast.

 

In overnight screen trade, the e-cbot May soybean contract settled down 2 1/4 cents at US$5.85 1/2 a bushel. May soymeal ended down 50 cents a short tonne at US$173.40, and May soyoil closed down 0.12 cent at 23.95 cents a pound.

 

A close below the February low of US$5.81 would produce a bearish downside breakout from the aforementioned trading range and suggest more price weakness to come, a technical source said. First resistance for May soybeans was seen at US$5.89 1/2 - Thursday's high - and then at US$5.95. First support was seen at US$5.85 - Thursday's low - and then at US$5.81.

 

In its key monthly crop report, the USDA on Friday raised its forecast for 2005-06 U.S. soybean ending stocks by 10 million bushels to a record 565 million bushels due to a new prediction for lower-than-expected exports.

 

The USDA lowered its forecast for U.S. soybean exports to 900 million bushels, down from its February forecast of 910 million.

 

The record U.S. soybean carryout is 536 million bushels, set in 1985-86. The U.S. marketing year for soybeans runs Sept. 1 through Aug. 31.

 

The USDA also raised its forecast for 2005-06 global soybean ending stocks to 54.42 million metric tonnes after raising its forecast for Chinese soybean production to 18.3 million metric tonnes from its February prediction of 17 million tonnes. China is the top buyer of U.S. soybeans, hence its supply and demand data are closely watched.

 

The USDA did not alter its forecasts for 2005-06 Brazilian and Argentine soybean production, leaving those numbers at 58.5 million tonnes and 40.5 million tonnes, respectively.

 

U.S. Midwest cash soybean basis bids were mixed early Friday, cash dealers said. Spot cash soybean bids were down 4 cents in St. Louis, down 5 cents in Cincinnati, and up 1 cent in central Illinois, they noted.

 

In Friday's CBOT soy delivery news, there were 792 deliveries posted Friday against CBOT March soybeans, with a customer of Dowd Wescott stopping 266 lots, brokers noted.

 

There were 284 deliveries posted Friday against CBOT March soyoil, with a customer of Banc of America stopping 224 lots. No soymeal deliveries were posted.

 

At China's Dalian Commodity Exchange, soybean futures ended mixed Friday in a lackluster market pressured by a spread of the deadly H5N1 bird flu virus. The benchmark September 2006 soybean contract settled RMB2 lower at RMB2,710 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Friday, with the benchmark May CPO contract ending at MYR1,458 a metric tonne, down MYR6 from Thursday after moving between MYR1,453 and MYR1,458.

 

In Rotterdam, spot soybean were firm and soymeal prices were steady, cash sources said.