March 27, 2006

 

CBOT Soy Outlook on Monday: Up 3-6 cents on e-CBOT, corn, China

 

 

Soybean futures at the Chicago Board of Trade were called to open up 3-6 cents Monday following firm e-cbot trade in corn and soybeans and gains in Chinese soybean futures on speculative buying and optimism about improving feed demand following months of bird flu concerns, brokers said.

 

"We're trying to figure out why e-cbot corn futures were higher overnight and everyone is talking about better Chinese feed demand," one U.S. grain and oilseed analyst said Monday. "However, there really isn't anything bullish here to rally CBOT soy early this morning, so we'll have to see how the technical trade works if we open up 3-6 cents."

 

At China's Dalian Commodity Exchange, the benchmark September 2006 soybean contract settled up RMB14 at RMB2,696 a metric tonne, after trading between RMB2,673 and RMB2,706/tonne.

 

China hasn't reported any fresh outbreaks of bird flu in poultry in the past month, and the latest statistics indicate that prices of poultry and eggs have begun to rise slightly since mid-March.

 

Asian analysts said the market had become more optimistic, while U.S. analysts suggested the gains could have been largely technically based following CBOT gains.

 

DCE September 2006 contract rose RMB18 to settle at RMB2,304/tonne. Soyoil futures settled mostly lower, with the benchmark September 2006 contract down RMB6 at RMB5,165/tonne.

 

In overnight screen trade, the e-cbot May soybean contract settled up 5 cents at $5.78 3/4 a bushel. May soymeal ended up $1.60 a short tonne at $176.90, and May soyoil closed up 0.19 cent at 22.93 cents a pound.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended March 21 boosted their net short position. They boosted their short stance by 13,631 lots to hold 81,041 short positions and decreased their long holdings by 880 lots to hold 51,011 long positions.

 

For CBOT soybean futures and options combined, speculators were short 79,950 lots, up 15,476 contracts from the week before, and long 50,361 contracts, down 2,921 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended March 21 also boosted their net short position. They increased their short holdings by 1,684 lots to hold 38,360 short positions and cut their long holdings by 13 lots to hold 19,597 contracts.

 

For CBOT soymeal futures and options combined, speculators also boosted their net short stance. They were short 37,618 lots, up 908 contracts, and long 19,547 contracts, down 502 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended March 21 cut their net long position, decreasing long holdings by 7,020 lots to 39,429 lots and decreasing short holdings by 785 lots to 14,932 lots.

 

For CBOT soyoil futures and options combined, speculators also cut their net long stance, decreasing long holdings by 8,340 lots to 37,247 contracts and cutting short holdings by 440 lots to 16,962 lots.

 

U.S. Midwest cash soybean basis bids were steady to firm Monday, cash dealers said. Spot U.S. cash soybean bids were flat in St. Louis, up 2 cents in Sioux City, Iowa, and up 4 cents in Louisville, Ken., they noted.

 

Forecasts for rains this week in the U.S. Midwest, a month before soybean plantings, were considered bearish for CBOT soy futures, while the building South American soy harvest and export competition were also seen limiting CBOT soy gains Monday, analysts said.

 

In soy export news, Taiwan bought 120,000 tonnes of Brazilian soybeans.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Monday.

 

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