March 15, 2006

 

CBOT Soy Outlook on Tuesday: Down 1-3 cents on NOPA, US weather, India

 

 

Soybean futures at the Chicago Board of Trade were called to open down 1 cent to 3 cents on bearish National Oilseed Processors Association February crush data, improved U.S. planting conditions, a building South American soy harvest and India's boost in its soyoil import base price, brokers said..

 

"The combination of a smaller-than-expected NOPA February crush and larger-than-expected soyoil stocks is bearish," said Vic Lespinasse, a CBOT floor analyst for AG Edwards & Sons. "I would expect more unwinding of the CBOT soyoil/soymeal spread."

 

NOPA on Tuesday reported its members crushed 129.9 million bushels of soybeans during February, below analysts' expectations of 130.25 million. NOPA soyoil stocks at the end of February totaled 2.316 billion pounds, above analysts' expectations of 2.215 billion pounds, with the yield racing to 11.73 pounds per bushel.

 

CBOT soy prices were also expected to remain pressured Tuesday by ideas of improved U.S. planting conditions as recent rains have recharged many fields.

 

Moreover, key vegetable oil importer India cut the base import price of crude palm oil to $434 a metric tonne from $437/tonne and raised the base import price of crude soyoil has been increased to $537/tonne from $524/tonne.

 

India's federal government sets base import prices for palm and soyoils, with import duties calculated from these prices regardless of the actual price at which importers buy the commodity.

 

The Ministry of Finance generally issues notifications twice every month about changes in base import prices of edible oils, even if the base prices remain unaltered. The government doesn't provide reasons for making price changes, though market participants say shifts in base prices usually reflect, at least to some extent, fluctuations in international edible oil prices.

 

And the building harvest of a projected record South American soy crop and lingering concerns about a possible reduction in U.S. soymeal demand due to the global spread of bird flu were also expected to limit buying interest in CBOT soy on Tuesday, brokers said.

 

In a sign of the competitive prices of the newly harvested South American crop, Taiwan's Breakfast Soybean Procurement Association, or BSPA, on Tuesday bought 60,000 metric tonnes of Brazil-origin soybeans.

 

In overnight screen trade, the e-cbot May soybean contract settled down 2 1/2 cents at $5.82 a bushel. May soymeal ended down 90 cents a short tonne at $173.40, and May soyoil closed unchanged at 23.71 cents a pound.

 

A close in CBOT May soybeans below the February low of $5.81-$5.79 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 $5.96 and then at $6.00. First support is seen at $5.81 1/4 and then at $5.79.

 

In Tuesday's CBOT soybean delivery news, 295 deliveries were posted against CBOT March soybeans, with the Term Commodities house account stopping 100 lots, brokers noted.

 

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

 

There were 337 deliveries posted Tuesday against CBOT March soyoil, with a customer of Banc of America stopping 313 lots. There were 34 soymeal deliveries posted.

 

U.S. Midwest cash soybean basis bids were mixed Tuesday, cash dealers said. Spot cash soybean bids were down flat in St. Louis and Sioux City, Iowa, down 7 1/2 cents in Peoria and up 1 cent in Cincinnati, Ohio, they noted.

 

At the Dalian Commodity Exchange, soybean futures settled mostly lower on supply and H5N1 bird flu concerns, brokers said.

 

The benchmark September 2006 soybean contract settled RMB16 lower at RMB2,689 a metric tonne, after falling to a six-week low of RMB2,678/tonne in the afternoon session.

 

The benchmark September 2006 soymeal contract fell RMB18 to settle at RMB2,301/tonne, and the September 2006 soyoil contract settled RMB14 lower at RMB5,217/tonne.

 

Late Monday, the Dalian Commodity Exchange announced several changes to its soymeal contracts, including lowering the quality of soymeal to be delivered and raising price limits to 4% from 3%. The measures were aimed at attracting more investors, as the market has been lackluster, analysts said.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended mixed. The benchmark May CPO contract ended at MYR1,439 a metric tonne, down MYR6 from Monday. Other contracts ended MYR8 lower to MYR5 higher.

 

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