March 31, 2006

 

CBOT Soy Review on Thursday: Up on gold, quarter-end, USDA positioning

 

 

Chicago Board of Trade soybean futures settled higher Thursday on speculative buying, gains in other commodities including precious metals and oil; dollar weakness; and positioning before Friday's quarter-end and key U.S. Department of Agriculture 2006 plantings and quarterly stocks data, brokers said.

 

"Everyone is expecting record soy quarterly stocks," one CBOT soy broker said, ahead of Friday's report.

 

"Soy plantings follow corn, and farmers will plant a lot of corn if weather permits," he added. "The most bearish thing we could see tomorrow would be an unchanged corn acreage figure."

 

He also noted that CBOT soy traders were hesitant to sell CBOT soybean futures on ideas that additional speculative fund moneys would flow into commodities on Monday, the first trading day of a new quarter.

 

Speculative funds were thought to be net short about 24,200 CBOT soybean futures before Thursday's open outcry opening bell, brokers said. They were thought to be net short about 14,100 CBOT soymeal futures and net long about 25,600 CBOT soyoil futures, they added.

 

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.

 

Analysts also noted a tendency for the USDA's March 31 quarterly stock estimates to come in below the trade's expectations.

 

CBOT May soybeans ended up 5 1/4 cents at US$5.87 3/4 a bushel, above its 20-day moving average of US$5.83 1/2 and just below its 50-day moving average of US$5.90 per bushel.

 

In Thursday's CBOT soybean futures pit trade, Goldenberg Hehmeyer and Rand Financial each bought 1,000 May; ABN Amro bought 800 May; Man Financial bought 600 May; Calyon Financial bought 400 May; UBS bought 400 May and sold 300 July; ADM sold a net 200 May; JP Morgan sold 400 May; R.J. O'Brien sold 300 May and Tenco Inc. sold a net 300 May and 500 July, brokers said.

 

In CBOT soybean spread trade, the Refco division of Man Financial and ADM each spread 400 September/July; R.J. O'Brien spread 400 September/May; and ABN Amro spread 400 July/May, they added.

 

Thursday's CBOT soybean options trade was also active, with Fimat buying 500 May US$6.00 calls and 2,000 July US$6.60 calls; and ABN Amro selling 1,000 November US$5.60 puts, they noted.

 

Recent weakness in the Brazilian real and forecasts for more U.S. Midwest rains through early next week limited Thursday's CBOT soy gains, brokers said.

 

DTN Meteorlogix forecast total rainfall by the end of next week at up to three-plus inches in the western and northern Midwest; and up to two-plus inches east of the Mississippi.

 

"Some delays in early-season field work will occur because of the wet weather; however, the improvement in soil moisture is a significant compensation for field work delays at this point in the season," said DTN's Bryce Anderson.

 

CBOT South American soybean futures settled higher Thursday. The CBOT SAS May futures settled up 3 1/2 cents at US$6.09.

 

In U.S. soybean cash news, U.S. midday cash soybean Gulf barge bids for April firmed 2 cents per bushel, sources said.

 

The USDA reported Thursday that weekly U.S. soybean export sales totaled 295,300 metric tonnes (old- and new-crop combined), within expectations for 200,000 to 400,000 tonnes.

 

Net old-crop weekly U.S. soybean sales of 220,700 metric tonnes were 5% below the previous week and 41% under the prior 4-week average. Major increases for Mexico (133,300 metric tonnes) and China (112,700 metric tonnes, including 113,000 metric tonnes switched from unknown destinations) were partially offset by decreases for unknown destinations (120,000 metric tonnes).

 

Meanwhile, U.S. soymeal weekly export sales totaled 179,100 tonnes (also old- and new-crop combined) above estimates of 70,000 to 125,000 tonnes and soyoil weekly export sales totaled 9,400 tonnes, at the high end of estimates for zero to 10,000 tonnes.

 

Net old-crop U.S. soymeal sales of 179,000 metric tonnes were 55% above the week earlier and 90% over the prior 4-week average. Major increases were reported for Canada (80,200 metric tonnes), Mexico (61,700 metric tonnes), Chile (23,100 metric tonnes), and Colombia (9,800 metric tonnes).

 

Net U.S. soyoil sales of 9,400 metric tonnes were primarily for Mexico (6,100 metric tonnes) and Nicaragua (3,000 metric tonnes).

 

 

SOY PRODUCTS

 

CBOT May soymeal ended Thursday up 70 cents at US$179.40 per short tonne, while the nearby five CBOT soymeal contracts settled up 70 cents to US$1.30 per tonne.

 

In CBOT soymeal trades, Iowa Grain bought 800 May, Man Financial bought 500 May, Fimat and JP Morgan each sold 300 May; R.J. O'Brien and Calyon Financial bought 200 May; and Bunge Grain sold 200 May, brokers said.

 

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

 

CBOT soyoil futures also settled firm Thursday, with the nearby five CBOT soyoil contracts up 0.17 cent to 0.26 cent per pound.

 

In Thursday's CBOT soyoil trades, Rand Financial bought 1,100 May and 200 July, Tenco Inc. bought a net 300 May and 200 July, Fimat traded 400 May and Calyon Financial sold a net 600 May, brokers said.

 

CBOT May oil share ended Thursday at 39.24% and the May crush was at 61 3/4 cents.