April 25, 2006
CBOT Soy Review on Monday: Beans gain but recede from session highs
Chicago Board of Trade soybean futures rose Monday on speculative-led buying, seasonal considerations and a weak U.S. dollar, though prices closed off their strongest levels of the session on profit-taking, traders and analysts said.
Basis July contracts, soybeans gained 4 3/4 cents to US$5.88 a bushel, soymeal added US$2 to US$174 a tonne and soyoil lost 10 points to 24.96 cents a pound.
"It was a little strange just because some of the other outside markets were lower, but the dollar was lower and they've been keying off of that. So that triggered some fund buying," said Joel Karlin, research analyst at Integrated Grain and Milling in Fresno, Calif.
Fundamentally, the weather is mostly favorable for early fieldwork, which should be a touch bearish for the market, sources said. But seasonal considerations are also at play.
"The weather forecast looks fairly good for corn, so there may be this mentality that the quicker the corn gets in the ground maybe we won't have as many bean acres planted," said Karlin.
Dan Zwicker, analyst at AgriVisor Services in Bloomingtonne, Ill., agrees. "I think it's a reaction to, while the corn planters are rolling, we're going to plant some extra corn and less bean acres," he said.
News that soybean export inspections were weaker than expected added mild bearish sentiment to the market, though prices overcame the news and later traded to session highs on the speculative and fund buying.
Export inspections for soybeans were 9.160 million bushels in the week to April 20, versus 11.644 million the previous week, the U.S. Department of Agriculture reported. For the 2005-06 marketing year to date, bean inspections total just 742.2 million bushels, compared to 935.2 million at the same time in the 2004-05 season.
In other news, funds decreased short soybean futures positions by 9,665, to total 93,543 positions in the week to April 18, a nearly 2% decline, the Commodity Futures Trading Commission's Commitments of Traders report showed. Fund shorts now account for 25% of the market's open interest. Fund longs fell by 2,617 to 53,521 positions, versus 56,138 the previous week, and now account for 14.2% of open interest.
In soybeans, Man Financial bought 1,500 July, ABN Amro bought a net 1,000 July, Calyon Financial bought 1,200 July, J.P. Morgan bought 700 July and Refco bought 500 July.
UBS sold 1,000 July, Rand Financial and ADM each sold 500 July and ABN Amro and Calyon Financial each sold 500 Nov.
SOY PRODUCTS
The product markets closed mixed as traders unwound some oil/meal spreads that had been put on in recent sessions as crude oil futures made record highs. The surge in crude oil created renewed interest in soyoil for use in biodiesel as an alternative energy source to crude.
Sharply lower crude oil futures on the New York Mercantile Exchange on Monday, however, led to late selling in soyoil.
In news, funds decreased short positions in CBOT soymeal to coincide with a similar decline in soybeans in the week to April 18, the Commitments of Traders report showed. Fund shorts declined 8,581 to 43,720 positions for the week and now account for 25.7% of meal's open interest, from 29% the previous week.
In soyoil, funds added 2,238 long positions to total 45,719, or 22.8% of open interest.
In meal, Rand Financial bought 500 July, ADM bought 400 May, R.J. O'Brien bought 300 May and 300 July, while Man Financial and Calyon Financial each bought 300 July. On the sell side, Bunge sold 800 May, Tenco sold 400 December and Fimat sold 300 May and 100 July.
In oil, ABN Amro bought a net 600 July, Term Commodities bought a net 300 July, R.J. O' Brien bought 600 July, Fimat bought a net 400 July, ADM bought a net 300 July, while Man Financial, Prudential Financial and Fortis each bought 300 July. S.A. Trading bought 400 July. On the sell side, Bunge and Citigroup each sold a net 300 July, Tenco sold 400 July and 100 Oct and Rand Financial sold a net 200 July.
