March 14, 2006

 

CBOT Soy Review on Monday: Ends lower on US rains, wheat, funds

 

 

Chicago Board of Trade soybeans ended lower Monday on light speculative sales, losses in U.S. wheat futures on forecasts for U.S. Southern Plains rains later this week and prospects for improved U.S. spring soy planting conditions after recent rains, brokers said.

 

"The good rains across the U.S. Midwest, a month ahead of plantings, are just what the doctor ordered," said Vic Lespinasse, a CBOT grain analyst for AG Edwards & Sons.

 

The spread of a deadly strain of bird flu to Myanmar and Cameroon, along with fears of a third case of mad cow in the U.S., were also bearish for CBOT soy futures Monday, as they raised fears of a possible slowdown in U.S. soymeal demand, the brokers added.

 

CBOT May soybean futures settled Monday down 4 3/4 cents at US$5.84 1/2 per bushel.

 

CBOT May soymeal ended unchanged at US$174.30 per short tonne and May soyoil closed down 0.45 cent at 23.71 cents per pound.

 

The Commodity Futures Trading Commission reported in its Commitments of Traders Report on Friday that non-commercials boosted their net short position in CBOT soybean futures to 4,343 lots as of last Tuesday. They were net short 1,623 CBOT soybean futures and options.

 

Speculators were net short 14,655 CBOT soymeal futures and options as of March 2. However, they boosted their net long CBOT soyoil futures and options position to 24,997 lots from 6,984 contracts the previous week.

 

In Monday's CBOT soybean pit trades, funds sold at least 3,300 contracts, brokers said. ABN Amro and R.J. O'Brien each sold 500 May; O'Connor and Co. sold 400 May and 200 July; and Kottke sold 300 July, brokers said. FC Stonnee bought 200 July while ADM sold a net 100 May, they noted.

 

In soybean spread trade, Tenco Inc. spread 200 March/May; ABN spread 200 May/July; and Produce Grain spread 300 November/July, they noted.

 

In soy export news, the U.S. Department of Agriculture reported Monday that weekly U.S. soybean export inspections totaled 28.883 million bushels, above analysts' estimates of 23 million-25 million and above the previous week's 26.353 million bushels.

 

Taiwan sought 40,000-60,000 metric tonnes of Brazil or U.S.-origin soybeans in a buy tender to be concluded Tuesday, and India sold about 5,000 metric tonnes of soymeal to a Thai buyer, a senior Indian soy industry official said Saturday.

 

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, sources noted.

 

Indian prices have been pressured by the recent bird-flu epidemic that reduced domestic demand and the arrival of South American soymeal in the international market.

 

Meanwhile, U.S. Gulf CIF basis for soybeans for the last half of May fell 6 cents per bushel Monday from values quoted late last week as traders anticipated the reopening of additional areas of the interior rivers system to barge traffic later this week, cash sources said.

 

The USDA quoted Monday New Orleans area soybean basis at premiums of just 34 cents to May CBOT futures, representing an 8-month low and a decline of 37 cents in just four weeks.

 

Locks located in the mid-Mississippi Valley - which have been closed for three months for routine maintenance and repairs - are scheduled to begin locking grain barges later this week, effectively making millions of bushels of grain in landlocked storage immediately available to the world market, sources noted.

 

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

 

CBOT March soy futures expire Tuesday while Thursday is the last day to deliver against CBOT March soy futures.

 

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

 

The building South American soy harvest also weighed on CBOT soy futures, brokers said.

 

Brazilian soy harvest weather forecasts called for mostly dry conditions or light showers 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 Tuesday. Dry weather was expected Wednesday.

 

CBOT South American soybean futures ended lower Monday. The CBOT SAS May futures settled down 9 cents at US$5.97 per bushel

 

CBOT soy traders looked ahead to Tuesday's report from the National Oilseed Processors Association.

 

Analysts expect NOPA to report its members' February soybean crush totaled 130.25 million bushels, down from the February 2005 figure of 131.1 million bushels and the January 2006 soy crush of 145.6 million bushels, analysts said Friday.

 

NOPA members' soyoil stocks in February are expected to rise to 2.215 billion pounds from the 2.056 billion pounds reported for January.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended mixed Monday, with the nearby five contracts up 30 cents to down 30 cents per tonne.

 

Concerns lingered about soymeal demand amid the global spread of a deadly strain of bird flu, but the relationship between soymeal and soyoil has gotten out of line, brokers said.

 

CBOT soyoil futures have gained on CBOT soymeal futures recently on concerns that bird flu will decrease the demand for U.S. soymeal, thus prompting a cut in U.S. soybean crush that would make soyoil less available even as U.S. biodiesel demand is thought to increase.

 

In CBOT soymeal trades, funds were about even after selling lightly early. JP Morgan sold a net 200 May; Fimat and Man Financial each sold a net 100 May; and Calyon Financial bought 200 May, brokers said.

 

CBOT May oil share ended Monday at 40.48%, correcting from Friday's 40.94%, and the May crush was at 59 3/4 cents.

 

Soyoil futures settled lower Monday, with the nearby five CBOT soyoil contracts down 0.37 cent to 0.51 cent per pound.

 

In Monday's CBOT soyoil trades, funds were net sellers after selling 1,100 lots by 13:30 EST. Tenco Inc. and R.J. O'Brien each sold a net 300 May; JP Morgan sold 200 May; Rosenthal Collins bought 200 May; and the commercial arm of JP Morgan bought 600 May, brokers said.