March 28, 2006

 

CBOT Soy Review on Monday: Up on soymeal, technicals, exports, brazil

 

 

Chicago Board of Trade soybean futures ended higher Monday but in the lower half of the day's trading range, on speculative buying and following gains in neighboring soymeal futures, brokers said.

 

"I'm not too certain why all of a sudden they got excited about meal, but I know Oil World has commented that world meal trade is up quite a bit," said Anne Frick, Prudential Financial oilseed analyst. "That flies in the face of anecdotal reports of poultry demand being so weak."

 

Concerns about the spread of the deadly Asian H5N1 strain of bird flu had prompted recent talk and reports of lagging poultry demand.

 

Also supportive were Friday's larger-than-expected CFTC net speculative short position in CBOT soybeans futures and options; larger-than-expected weekly U.S. soybean export inspections of 24.771 million bushels; and talk of weekend harvest delays in Brazil, CBOT brokers noted.

 

CBOT May soybeans ended Monday up 5 3/4 cents at US$5.79 1/2 after hitting an 8-session high of US$5.87 1/2 per bushel.

 

In CBOT soybean futures pit trade, speculative funds had bought 7,700 contracts by 1:30 p.m. EST. Commercials were net sellers, with ADM Investor Services selling 400 May, Bunge Grain buying 100 May and Term Commodities buying 200 May, brokers said.

 

ABN Amro bought about 2,200 May and sold 200 July, Rand Financial bought 2,500 May, Man Financial bought 1,000 May, Calyon Financial traded 500 May and Rosenthal Collins sold 500 May, they noted.

 

Monday's CBOT soybean spread trade was active, with Fimat spreading 1,000 July/May, Term Commodities spreading 800 November/July and ADM spreading 500 May/July.

 

The market opened higher, as expected, and then gained after the U.S. Department of Agriculture reported that weekly U.S. soybean export inspections totaled 24.771 million bushels, well above analysts' estimates of 15 million-17 million bushels.

 

Buy stops were triggered in the CBOT May soybean contract at US$5.82 and then at the 20-day moving average of US$5.85 1/2, brokers said.

 

Reports of soy harvest delays over the weekend in Brazil because of rain also buoyed futures, some brokers said.

 

In neighboring Argentina, farmers had harvested 10.5% of the 2005-06 soybean crop by Saturday, down 3 percentage points from last year, the Buenos Aires Cereals Exchange reported Monday.

 

In global soy export news, Taiwan bought 120,000 tonnes of Brazilian soybeans. Meanwhile, 2006-07 Brazilian soybean export registrations totaled 32.5% of the estimated 57.6 million metric-tonne harvest as of March 15, compared to 24.7% of the estimated 52.6 million soy crop that was registered at this time in 2005-06, according to government figures released by the Brazilian Vegetable Oils Industry Association, or Abiove.

 

This year's registrations are still well below the 2004-05 figure of 61.9% when favorable international soy prices, high Chinese soybean demand and a favorable exchange rate between the Brazilian real and the U.S. dollar encouraged soy exports, sources noted.

 

CBOT South American soybean futures also ended higher Monday. The CBOT SAS May futures settled up 5 1/2 cents at US$6.00 1/2.

 

Spot U.S. midday cash soybean Gulf barge bids were flat on Monday, sources said.

 

Forecasts for rain this week in the U.S. Midwest, a month before soybean plantings, limited Monday's CBOT soy gains, brokers said.

 

They also noted positioning into Friday's USDA 2006 prospective U.S. spring plantings and quarterly stocks data as of March 1 could keep trade muted this week.

 

Analysts on average expected the USDA to report Friday that March 1 U.S. soybean stocks totaled a record 1.678 billion bushels, above last year's 1.381 billion. Estimates ranged from 1.660 billion to 1.703 billion bushels.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended firmer Monday on speculative and commercial buying, with analysts noting talk of good global soymeal export trade.

 

The nearby five CBOT soymeal contracts settled Monday up US$2.90 to US$3.50 per tonne.

 

In CBOT soymeal trades, funds bought 3,500 lots by 1:30 p.m. EST, led by Rand Financial's buying of 1,000 May and Goldenberg Hehmeyer's spreading of 1,000 May soymeal/1,500 May soyoil, brokers said. R.J. O'Brien bought 800 May while Man Financial bought 500 May and sold 100 July.

 

Commercial Bunge Grain bought 300 May while ADM Investor Services bought 100 May, brokers said.

 

Soymeal spread trade was modest, with Iowa Grain spreading 50 May/July and 50 July/December, they added.

 

Spot midday interior U.S. cash high-protein soymeal offers were steady to firm Monday, with a US$2-per-tonne increase at Cedar Rapids, Iowa, sources said.

 

CBOT soyoil futures settled weak Monday, with the nearby five CBOT soyoil contracts down 0.03 cent to 0.08 cent per pound.

 

In Monday's CBOT soyoil trades, commercials bought 1,500 lots by 1:30 p.m. EST. Speculative funds were net even after Goldenberg Hehmeyer's sale of 1,500 May, brokers said.

 

Commercial Bunge Grain bought 400 May, ADM bought 200 May and 300 July, and Term Commodities bought 400 July, they said.

 

In fund trade, Tenco Inc. bought 300 May and 900 July, Calyon Financial bought 500 May, Rand and R.J. O'Brien each bought 300 May while R.J. O'Brien also sold 300 July, they said.

 

CBOT May oil share ended Monday at 38.79% and the May crush was at 63 cents.