April 17, 2007

 

CBOT Soy Review on Monday: Ends lower after choppy, light-volume trade

 

 

Chicago Board of Trade soybean futures ended a choppy, two-sided session posting modest declines Monday, pulling back from midday gains on end-of-the-session position squaring.

 

May soybeans ended 12 cents lower at US$7.36, July soybeans settled 1 3/4-cent lower at US$7.53 1/4, and November soybeans finished 1 1/4-cent lower at US$7.82 1/2. May soymeal settled US$0.20 higher at US$199.50 per short tonne. May soyoil ended 19 points lower at 32.78 cents a pound.

 

The market took a wait-and-see approach to Monday's session, as uncertainty over potential planting advances for corn this week and what effect that will have on soybean acreage kept many traders sidelined, analysts said.

 

Soybean/corn spreading was a feature for most of the day, with traders taking precaution amid the potential for farmers to get in the fields this week amid warmer and drier Midwest weather forecasts, traders said. However, the variability of field conditions and the length of time that some fields will take to dry out for farmers to resume seeding operations was enough to keep trader on guard.

 

Meanwhile, the ability of active contracts to hold last week's lows and a supportive crush figure provided mild strength. However, lackluster export demand amid increased competition from South American origins limited upside potential, traders added.

 

The DTN Meteorlogix weather forecast calls for a drier weather pattern across the central U.S. this week. Temperatures will be mostly above normal in the western Midwest and mainly normal to below normal in the eastern Midwest. There will be some improvement in field work prospects, notably over the western Midwest. Northern and eastern Midwest areas will still be stymied, however, due to cool temperatures and recent rainfall.

 

During the next 10 days, weather patterns remain contrary to wide-open field work prospects in the Midwest. Next week brings a renewed round of normal-to-above-normal precipitation in the western Midwest, with the rainfall pattern moving into the eastern Midwest during the end of next week. This scenario keeps field work progress held back across the Corn Belt, Meteorlogix forecasts.

 

The National Oilseed Processors Association said Monday its March soybean crush rates were 147.991 million bushels, above the trade expectation of 144.2 million bushels. It was also significantly over the February figure of 130.779 million bushels. Analysts expected a large crush due to more days in March, according to a survey of industry analysts.

 

The USDA reported 12.491 million bushels of soybeans were inspected for export in the week ended April 12. The export figure is down 45.3% from the previous week's 22.822 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 15 million to 20 million bushels.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses, with speculative funds light net sellers on the day.

 

 

SOY PRODUCTS

 

Soy product futures ended mixed, with the unwinding of some soyoil/soymeal spreads a featured attraction. Soyoil futures ended on the defensive, backpedaling on a higher-than-expected soyoil stocks figure in the NOPA crush report. The stocks figure overshadowed supportive spillover support from strength in world vegoils markets, with Malaysian palm oil futures rallying to new 8 1/2 year highs overnight.

 

NOPA said soyoil stocks in March were 2.933 billion pounds, above trade expectations of 2.748 million pounds and up from 2.820 million pounds in February. Growing soyoil stocks is a reflection that biodiesel hope at this point has not been realized, said John Kleist, senior analyst with Top Third Ag Marketing in Chicago.

 

Soymeal futures edged higher, benefiting from profit taking on oil/meal spreads. The market managed to gain some product share, but overall remains the weakest in the soy complex, traders said. May oil share ended at 45.11% and the May crush ended at 63 1/2 cents.

 

In soyoil trades, speculative funds were estimated sellers of 1,000 lots, with JP Morgan selling 200 May and 300 July. Bunge Chicago bought 400 July.

 

In soymeal trades, buyers and sellers were light scattered among various commission houses.