March 30, 2006

 

CBOT Soy Review on Wednesday: Up after lackluster trade; USDA awaited

 

 

Chicago Board of Trade soybean futures settled mostly firm Wednesday after a session of lackluster, choppy trade amid continued positioning ahead of Friday's key U.S. Department of Agriculture 2006 plantings and March 1 stocks data, brokers said.

 

"You can take today and tomorrow, and as soon as Friday morning at 7:30 a.m. (CST), it's all forgotten," said Vic Lespinasse, a CBOT grain analyst for AG Edwards & Sons.

 

"The corn had fund support," he added. "The wheat had local and commission house support until Kansas City (HRW wheat) started backing off and all the early buyers bailed out. The beans have nothing going for them today, no sponsor; so they are just drifting all day long and not finding support.

 

"I don't think it (today's trade) matters," Lespinasse concluded. "This is just a big waiting room here."

 

CBOT May soybeans settled up 1 cent at US$5.82 1/2 a bushel.

 

In Wednesday's CBOT soybean futures pit trade, funds ended net buyers of about 500 lots, brokers said. Stern Trading bought 300 May, JP Morgan bought 400 May, Citigroup bought 200 May, Rand Financial sold 200 May and 100 July, and Fimat sold 300 May, brokers said.

 

In CBOT soybean spread trade, Iowa Grain and R.J. O'Brien each spread 200 July/May while Fimat spread 200 May/July and Tenco Inc. spread 200 November/July, they said.

 

CBOT soybean options trade was active Wednesday, with Citigroup buying 1,000 May US$5.40 puts; Rand Financial buying 1,200 May US$6.10 calls, selling 200 May US$5.80 puts; and ADM selling 400 May US$5.80 puts, selling 200 May US$5.70 puts and buying 200 May US$5.40 puts.

 

U.S. grain and oilseed analysts on average expected the USDA to report Friday that U.S. farmers would seed 74.050 million acres to soybeans, up from last year's 72.142 million.

 

March 1 U.S. soybean stocks were expected to be reported at a record 1.678 billion bushels, above last year's 1.381 billion. Estimates ranged from 1.660 billion to 1.703 billion bushels.

 

Still, analysts noted a tendency for the USDA's March 31 quarterly stock estimates to come in below the trade's expectations, and they noted Dow Jones' average analyst plantings estimate was at the high end of pre-report estimates.

 

This week's weak Brazilian real and forecasts for U.S. Midwest rains during the next 72 hours of 0.5 to 1 inch, followed by similar rains next Sunday and Monday ahead of next month's soy plantings, limited Wednesday's CBOT soy gains, brokers said.

 

"The U.S. Midwest is in pretty good shape with spring plantings fast approaching, especially compared to the Southwest," AG Edwards' Lespinasse said. "Of course, we have a long way to go, but in general things look pretty good.

 

"In contrast, down in Brazil, everyone keeps lowering their numbers - it's (2006 soy production forecast) down into the mid-50s (million metric tonnes) instead of the upper-50s," he added.

 

Private and government estimates for the Brazilian soybean crop have been falling during the last month, and currently hover between 55.3 million and 57.2 million metric tonnes, down from a high of 58.1 million tonnes predicted in January.

 

CBOT South American soybean futures settled firm Wednesday. The CBOT SAS May futures settled up 1 cent at US$6.05 1/2.

 

In Wednesday's U.S. soy cash news, U.S. midday cash soybean Gulf barge bids for April were unchanged, sources said.

 

 

SOY PRODUCTS

 

CBOT May soymeal ended up 30 cents at US$178.70 per short tonne, while the nearby five CBOT soymeal contracts settled up 40 cents to down 40 cents per tonne.

 

In CBOT soymeal trades, funds bought 300 lots. Bunge Grain bought 200 May; Iowa Grain bought 300 May; JP Morgan bought 100 May and 100 December and sold 100 July; Fimat bought 100 July and sold 100 May and 100 August; and Prudential Financial sold 100 July, brokers said.

 

CBOT soymeal spread trade was quiet Wednesday, they noted.

 

Spot midday interior U.S. cash high-protein soymeal offers were steady Wednesday, cash sources said.

 

CBOT soyoil futures settled firm Wednesday, with the nearby five CBOT soyoil contracts up 0.01 cent to 0.07 cent per pound.

 

In Wednesday's CBOT soyoil trades, funds bought 500 lots, brokers said. Bunge Grain sold 300 May; ADM sold 100 May; Fimat sold a net 200 May and traded 200 July; Man Financial bought 200 May; JP Morgan bought a net 100 May and 200 July; and Tenco Inc. bought 200 May, brokers said.

 

CBOT May oil share ended Wednesday at 39.15% and the May crush was at 63 1/4 cents.