March 13, 2006

  

CBOT Soy Outlook on Monday: Down 3-4 cents on US rains, South American harvest

 

 

Soybean futures at the Chicago Board of Trade were called to open down 3 cents to 4 cents per bushel Monday following weak overnight trade on improved U.S. soil conditions after recent rains ahead of the U.S. planting season and the building South American soy harvest, brokers said.

 

In overnight screen trade, the e-cbot May soybean contract settled down 4 1/4 cents at US$5.85 a bushel. May soymeal ended down 80 cents a short tonne at US$173.50, and May soyoil closed down 0.19 cent at 23.97 cents a pound.

 

A close in CBOT May soybeans 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.

 

First resistance for May soybeans is seen at US$5.96 1/2--Friday's high--and then at US$6.00. First support is seen at US$5.81--Friday's low--and then at US$5.79.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended March 7 boosted their net short position. They boosted their short stance by 1,120 lots to hold 60,592 short positions and increased their long holdings by 593 lots to hold 56,249 long positions.

 

For CBOT soybean futures and options combined, speculators were short 58,680 lots, up 832 contracts from the week before, and long 57,057 contracts, up 1,571 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended March 7 boosted their net short position. They increased their short holdings by 2,077 lots to hold 35,274 short positions and boosted their long holdings by 1,986 lots to hold 19,811 contracts.

 

For CBOT soymeal futures and options combined, speculators also boosted their net short stance. They were long 20,839 lots, up 363 contracts, and short 35,494 contracts, up 2,860 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended March 7 boosted their net long position, cutting short holdings by 4,253 lots to 15,730 lots and increasing long holdings by 12,210 lots to 41,984 lots.

 

For CBOT soyoil futures and options combined, speculators also boosted their net long stance, decreasing short holdings by 3,480 lots to 16,901 contracts and boosting long holdings by 14,533 lots to 41,898 lots.

 

U.S. Midwest cash soybean basis bids were mostly steady to weak, cash dealers said. Spot cash soybean bids were down 7 cents in St. Louis, steady in Sioux City, Iowa, and down 4 cents in Cincinnati, Ohio, they noted.

 

In Monday's CBOT soybean delivery news, there were 539 deliveries posted against CBOT March soybeans, with a customer of Dowd Wescott stopping 353 lots, brokers noted.

 

CBOT soybean registrations as of late Friday totaled 3,836 lots, unchanged from the previous day's figure.

 

There were 60 deliveries posted Monday against CBOT March soyoil, with a customer of Banc of America stopping all 60 lots. No soymeal deliveries were posted.

 

CBOT soyoil registrations were unchanged at 6,413 lots and soymeal registrations were unchanged at 34 lots.

 

The building South American soy harvest was also seen weighing on CBOT soy futures, brokers said.

 

Brazilian soy harvest weather forecasts called for mostly dry conditions or light showers Monday and Tuesday across Mato Grosso and Mato Grosso Do Sul, according to Meteorlogix weather service. Scattered thunderstorms and showers were expected in the northern soy belt from Wednesday through Friday.

 

In Argentina, scattered showers were expected across Cordoba, Santa Fe and Northern Buenos Aires on Monday, with showers tapering off on Tuesday. Dry weather was expected on Wednesday.

 

In global soy export news, Taiwan's Breakfast Soybean Procurement Association, or BSPA, is seeking to buy 40,000-60,000 metric tonnes of Brazil or U.S.-origin soybeans in a tender to be concluded Tuesday, an official at the association said Monday.

 

An Indian soybean trader has sold about 5,000 metric tonnes of soymeal to a buyer in Thailand at US$218 per tonne, cost and freight, a senior industry official said Saturday.

 

Indian soy industry officials said India's soymeal exports in the current marketing year to September may surpass 3.0 million metric tonnes, versus the previous year's 1.85 million metric tonnes.

 

Indian prices came under pressure after the recent bird-flu epidemic that reduced domestic demand and the arrival of south American soymeal in the international market.

 

At China's Dalian Commodity Exchange, soybean futures ended mixed. The benchmark September 2006 soybean contract settled RMB5 lower at RMB2,705/tonne. The benchmark September 2006 soymeal contract fell RMB3 to settle at RMB2,319/tonne; and the September 2006 soyoil contract settled up RMB9 at RMB5,231/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended weak on concerns about sluggish consumer demand and record high stocks. The benchmark May CPO contract ended at MYR1,445 a metric tonne, down MYR12 from Friday after moving between MYR1,437 and MYR1,461/tonne.

 

In Rotterdam, spot soybean prices were mixed while soymeal prices were steady to weak, cash sources said.