December 3, 2005

 

CBOT Soy Review on Friday: Ends mostly up on US cash, cold US temps

 

 

Soybean futures at the Chicago Board of Trade ended mostly higher Friday on firm U.S. cash soybean basis bids amid a lack of farmer sales and speculation that cold near-term U.S. Midwest weather could boost livestock use of soymeal, brokers said.

 

Gains were limited by lingering concerns about U.S. export sales. Weekly U.S. soy export commitments through Nov. 17 are running 29% behind last year's sales, and shipments through the same date are 25% behind last year's tally, according to the U.S. Department of Agriculture.

 

CBOT January soybeans ended up 3 cents at US$5.62 3/4 per bushel.

 

December soymeal ended up US$1.70 per tonne at US$174.00, and January soymeal futures closed up US$1.10 at US$173.60.

 

CBOT December soyoil closed up 25 points at 21.29 cents per pound, and January soyoil ended up 29 points at 21.56 cents.

 

In soybean trades, funds were net buyers of about 2,000 lots. ABN Amro and Fimat each bought 500 January, Term Commodities bought 300 January; Rand Financial, Tenco Inc. and Kottke each bought 200 January; and Prudential Financial sold 300 January.

 

Cash U.S. soybean basis bids were mostly steady to firm Friday, with an 8-cent gain in Volga, S.D.; 4-cent gains in North Dakota, Nebraska and Minnesota locations; and a 5-cent gain in Bloomingtonne, Ill., cash sources said.

 

Midday U.S. Gulf soybean bids were unchanged.

 

In global news, South American soybean growing weather remained benign, while forecasts pointed to rain both Friday and then next Tuesday-Wednesday across key Brazilian soy-growing regions, an analyst noted.

 

The Brazilian Vegetable Oils Industry Association, or Abiove, maintained its estimates for the 2006-07 soy crop at 57.1 million metric tonnes, and soybean exports at 24.5 million.

 

Soyoil output was seen at 5.6 million tonnes next year, up from 5.5 million tonnes in October. Soy-oil exports for the year were seen at 2.45 million tonnes compared to 2.4 million tonnes in October.

 

Meanwhile, Argentina's farmers had planted 64% of the 2005-06 soybean crop by Thursday, down slightly from last year's 67%, the Agriculture Secretariat said Friday.

 

The annual pace is basically in line with that of the previous year, even though area is up more than a million hectares from last season. Planted area is forecast at a record 15.11 million hectares in 2005-06, up from 14.4 million previously.

 

The U.S. Department of Agriculture has forecast Argentina's 2005-06 soybean output at a record 40.5 million metric tonnes, up from last year's record of 39 million.

 

The USDA will issue updated estimates next Friday.

 

CBOT South American soybean futures on Friday ended firm, with the March futures settled up 1 3/4 cents at US$6.01 1/4 per bushel.

 

 

Soy Products

 

Soymeal futures ended firm in nearby months Friday as forecasts for extremely cold U.S. Midwest temperatures during the next five days suggested good soymeal usage among livestock, traders said.

 

Funds were net buyers, led by Tenco Inc.'s purchase of 200 January. Citigroup sold 200 January and UBS spread 600 January/March.

 

Traders noted lingering concerns that avian flu could limit soymeal usage globally, but also noted little fresh news to spark selling on that issue. Chickens are heavy consumers of soymeal.

 

Soyoil futures ended mostly firm Friday as speculative buying offset two-sided commercial trade, brokers said.

 

In soyoil trades, Cargill Investor Services bought 500 January, Fimat Futures bought 400 January, and Tenco Inc. bought 200 March and 200 July, brokers said. UBS spread 500 January/March.

 

In commercial trade, ADM Investor sold 400 January, Bunge bought 200 January and Cargill Inc. bought 300 January.

 

CBOT January oil share finished Friday at 38.29%, and the December/January crush was at 53 3/4 cents.

 

Soyoil deliveries totaled 1,302 contracts, with Fimat the biggest issuer at 865 contracts and Bunge the biggest stopper at 571 contracts.

 

In related news, the American Soybean Association has asked Congress to impose a US$1 per gallon tariff, effectively immediately, to halt palm oil-based biodiesel imports from Ecuador.

 

The first of what may be 3 million gallons worth of such imports per month arrived Nov. 8 at a port in Florida, sparking "outrage" from the soy group, which claimed it was never the intent of Congress for such shipments to qualify for US$1 per gallon domestic tax incentives.

 

Biodiesel is a naturally renewable alternative fuel, generally made in the U.S. from soyoil that is almost interchangeable with traditional diesel fuel.

 

Nearly 45 U.S. biodiesel plants are currently in operation and CBOT soyoil futures have been underpinned by estimates for increased domestic biodiesel production from soyoil.