March 24, 2006

 

CBOT Soy Review on Thursday: Weak on speculative sales,US export sales

 

 

CBOT soybeans ended weak Thursday on speculative sales, disappointing weekly U.S. soybean export sales and CBOT soymeal losses despite the U.S. Department of Agriculture's statement that Wednesday's late rumors about a possible bird flu case near the U.S./Mexican border were a hoax, brokers said.

 

Improved U.S. planting prospects and forecasts for a record 2005-06 U.S. soybean carryover also continued to weigh on CBOT soybean futures, they added.

 

CBOT May soybeans ended Thursday down 2 1/4 cents at US$5.74 3/4 a bushel, below the 10-day moving average of US$5.79 3/4.

 

In CBOT soybean futures pit trade, speculative funds were net sellers of about 1,300 lots. O'Connor and Co. sold 600 May, Tenco Inc. sold 300 May, JP Morgan sold 200 May and ABN Amro bought 300 May. Local traders bought May on the late-day bounce, they noted.

 

Thursday's CBOT soybean spread trade was modest, with Rand Financial spreading 300 January/November, Rosenthal Collins spreading 300 November/January and Refco Inc. spreading 200 May/July.

 

The USDA on Thursday reported weekly U.S. soybean sales (old- and new-crop combined) at 234,200 metric tonnes, below traders' expectations.

 

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 USDA.

 

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 U.S. Census Bureau On Thursday 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 prices 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.

 

Midday spot U.S. Gulf soybean basis bids fell 2 cents while interior bids were mixed Thursday, cash sources said.

 

CBOT South American soybean futures also ended lower Thursday. The CBOT SAS May futures settled down 2 cents at US$5.96 per bushel.

 

CBOT soy traders said they expected rather muted trade into next Friday's key government reports.

 

The U.S. Department of Agriculture is scheduled to report on March 31 its 2006 prospective U.S. spring plantings and quarterly stocks data as of March 1.

 

CBOT brokers said this week they expected the USDA to forecast on March 31 an increase of only 750,000 to 1 million acres to soybeans.

 

Early winter forecasts had called for an increase of 1 million-2 million U.S. soy acres this spring at the expense of corn, but firming CBOT corn prices at winter-end, bullish ethanol demand and recent U.S. Midwest rains have decreased the estimates.

 

U.S. 2005 soy seedings totaled 72.142 million acres, while the USDA in February at its annual outlook conference forecast 2006 U.S. soybean plantings would total 74 million acres.

 

Dow Jones Newswires will release an average of analysts' plantings estimates early next week ahead of the March 31 USDA prospective plantings and quarterly grain stocks report.

 

Soybeans in the top U.S. Midwest growing states are ideally planted the last week of April through the middle of May. Corn is generally seeded after soybeans in the U.S. Midwest.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended weak Thursday, with the nearby five contracts down US$1.30 to US$1.60 per tonne on commercial and speculative sales, brokers said.

 

Talk across the CBOT grain floor early Thursday of a possible case of bird flu along the U.S./Mexican border dissipated after the USDA said the rumor was hoax.

 

Thestreet.com mentioned the possible bird flu case in Mexico in a posting on Wednesday in James "Rev Shark" De Porre's Web blog.

 

Another posting on different Web site called radiolivre.org on Wednesday cited a story that Mexico had confirmed "its first case of avian flu in a duck found dead in the heart of Nogales."

 

However, the radiolivre posting was extremely similar to a previous news report from Feb. 26 out of Geneva, while Mexican Agriculture officials late Wednesday said they did not know the spokeswoman cited.

 

Still, CBOT soymeal futures dragged Thursday as traders worried about the possible lag in demand if bird flu hits the United States.

 

U.S. broilers are fed about 66-67% corn, 19-21% soymeal and 14% other types of feed, according to U.S. equity analysts. CBOT corn futures have generally held up under bird flu worries this winter amid larger open interest and heavier index fund buying in that pit.

 

In CBOT soymeal trades, funds sold Thursday at least 2,700 lots Thursday. Rand Financial sold 700 May, Man Financial sold 600 May, O'Connor and Co. sold 400 May, Prudential Securities sold 300 May and ABN Amro bought 300 May, brokers said.

 

Commercial Bunge Grain sold 800 May while ADM bought 100 May, brokers said.

 

Spot U.S. cash high-protein soymeal offers were unchanged Thursday, sources said.

 

Soyoil futures settled firm Thursday, with the nearby five CBOT soyoil contracts up 0.11 cent to 0.15 cent per pound.

 

In Thursday's CBOT soyoil trades, commercials were net buyers and funds were net even, brokers said.

 

Commercial ADM bought 300 May and 200 July, while Bunge Grain and Term Commodities each bought 100 May, they said.

 

Man Financial sold 900 May, Rand Financial sold 500 July and bought 200 May, and Iowa Grain bought 300 May and 100 July, brokers said.

 

CBOT May oil share ended Thursday at 39.84% and the May crush was at 61 1/4 cents.