March 23, 2006

 

CBOT Soy Outlook on Thursday: Down 1-2 cents on e-CBOT, export sales

 

 

Soybean futures at the Chicago Board of Trade were called to open down 1-2 cents per bushel Thursday on weak overnight trade and disappointing weekly U.S. soybean sales (old- and new-crop combined) of 234,200 metric tonnes, brokers said.

 

Talk across the CBOT grain floor early Thursday of a possible case of bird flu along the U.S./Mexican border were thought to be a hoax.

 

Meanwhile, net weekly U.S. old-crop soybean export sales of 233,100 metric tonnes were 39% below the previous week and 47% under the prior 4-week average, according to the U.S. Department of Agriculture.

 

Weekly U.S. soymeal export sales (old- and new-crop combined) totaled 116,400 tonnes and weekly soyoil sales totaled 4,000 tonnes, both matching analyst expectations.

 

"The exports continue to show the seasonal drawdown," an oilseed analyst said early Thursday. "So I'm looking for a little bit of a weaker tone (to open on Thursday) based on that feature. And we'll watch to see how consolidation trade goes from there."

 

The U.S. Census Bureau reported U.S. February soybean crush at 136.3 million bushels, above analysts' average estimate of 135.8 million, but traders said the crush number was essentially neutral for CBOT soy pricing Thursday.

 

Census also reported U.S. February soymeal stocks 301,552 short tonnes and U.S. February soyoil stocks at 2.694 billion pounds, just below the average analyst estimate of 2.724 billion pounds.

 

"Soyoil stocks were at the low end of expectations, but I can't really call 2.6 billion pounds a bullish number," the oilseed analyst said. "So, it doesn't give us any bullish news, but it's not as negative as it could have been."

 

In overnight screen trade, the e-cbot May soybean contract settled down 1 3/4 cents at $5.75 1/4 a bushel. May soymeal ended down 50 cents a short tonne at $174.80, and May soyoil closed down 0.13 cent at 22.75 cents a pound.

 

Prices Wednesday for CBOT May soybeans closed near the session low on tepid short covering in a bear market. Bears are still in technical control, a technical source said, noting the next downside objective was the January low of $5.72 1/2, or below.

 

First resistance for CBOT May soybeans was seen at $5.81 1/2 - Wednesday's high - and then at $5.85. First support was seen at $5.76 - Wednesday's low - and then at $5.71 1/4 - this week's low - and then at $5.70.

 

U.S. Midwest cash soybean basis bids were steady to firm Thursday, cash dealers said. Spot cash soybean bids were up 3 cents in Omaha and Council Bluffs, up 5 cents in Kansas City, and up 1 cent in Cincinnati, they noted.

 

At China's Dalian Commodity Exchange, soybean futures settled lower. The September 2006 soybean contract fell RMB8 to settle at RMB2,674 a metric tonne. The benchmark September 2006 soymeal fell RMB11 to close at RMB2,276/tonne and the September 2006 soyoil contract fell RMB10 to end at RMB5,152/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher after a lackluster trading day, sources said. The benchmark June CPO contract ended at MYR1,451 a metric tonne, up MYR4 from Wednesday. The contract was confined to a narrow range of MYR1,445-MYR1,451/tonne.

 

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