May 10, 2007

 

CBOT Soy Review on Wednesday: Up as ideas of corn acreage shift fade

 

 

Chicago Board of Trade soybean futures rose Wednesday on ideas that U.S. corn planting will continue at a strong clip and farmers won't shift many acres to soybeans, traders and analysts said.

 

July soybeans closed 8 cents higher at US$7.47 1/2 per bushel, and November soybeans climbed 8 1/2 cents to US$7.77 1/4. July soymeal closed up US$2.10 at US$201.90 per short tonne, and July soyoil settled 27 points higher at 33.31 cents per pound.

 

U.S. farmers advanced corn planting at a rapid rate last week and are on now on track to get the full crop in the ground amid forecasts for warm, dry weather, analysts said. DTN Meteorlogix calls for rest of the week to feature mostly dry weather in the Midwest and mostly above-normal temperatures, with highs in the 70s to 80s Fahrenheit.

 

The weather pattern will "give a favorable situation for finishing corn planting," the weather firm said. Western Midwest areas will have "favorable conditions for drying out of soils following heavy rains last weekend."

 

The U.S. Department of Agriculture reported Monday that U.S. farmers advanced corn seedings by 30 percentage points last week, to 53% planted as of May 6 from 23% planted as of April 29.

 

"If corn is going to be planted, then beans (futures prices) are going to be up because we're not going to see the (acreage) shift like people had feared," said Ross Carstens, a broker at Commodity Services Inc. in Des Moines, Iowa.

 

Commodity fund buying of an estimated 2,000 contracts also was supportive to soybeans, floor traders said. In pit trades, Rand Financial bought 500 July and Fimat bought 400 July.

 

Looking ahead, market participants will keep an eye on weather forecasts to see whether the outlook for corn planting changes, Carstens said. Otherwise, Thursday is expected to feature a consolidative-type trade ahead of the release of the USDA's May supply/demand report on Friday.

 

The report is scheduled for release at 8:30 a.m. EDT (1230 GMT). In it, the USDA is expected to slightly lower its estimates for 2006-07 soybean ending stocks, with a strong export and crush pace seen as the catalysts for the adjustment, analysts said.

 

The average analyst estimate from a Dow Jones Newswires survey pegged 2006-07 marketing-year ending stocks at 607 million bushels, down from 615 million in April.

 

The current pace of exports of U.S. soybeans coupled with large unshipped sales suggest exports for the 2006-07 marketing year might exceed the USDA's current 1.08 billion bushels, University of Illinois marketing specialist Darrel Good said in a market report.

 

The average analyst estimate for 2007-08 ending stocks was 337 million bushels, according to the analysts polled.

 

"I'm not looking for any big surprises," Carstens said when asked about the supply/demand report.

 

On Thursday, the USDA will release weekly export sales figures for the week ended May 3. Estimates for soybeans sales range from 100,000 to 300,000 metric tonnes, trade sources said.

 

 

SOY PRODUCTS

 

CBOT soy product futures ended higher with soybeans. Soymeal and soyoil futures were oversold and due for a bounce after recent price weakness, a floor analyst said. Higher palm oil prices overseas were also supportive, the analyst added.

 

Funds bought an estimated 2,000 soyoil contracts and 1,000 soymeal contracts. In soymeal pit trades, JP Morgan bought 400 July, while Rand Financial sold 500 July. In soyoil trades, Rand bought 600 July, and Bunge bought 500 July. Iowa Grains spread 700 December/July soyoil.

 

Estimates for weekly soymeal export sales range from 50,000 tonnes to 125,000 tonnes, according to trade sources. Soyoil sales estimates range from none to 30,000 tonnes.