February 13, 2006

 

CBOT Soy Outlook on Monday: Down 2-3 cents on weak e-CBOT, South America weather

  

 

Soybean futures at the Chicago Board of Trade were called to open down 2-3 cents per bushel Monday following weak overnight e-cbot trade and on improved South American soy growing weather, brokers said.

 

Good weekend rains over a large part of Brazil and forecasts for lingering rains this week were particularly eyed, they said.

 

"We're in the last three weeks of the key yield development time for soybeans out of South American, being Argentina and Brazil," said Tim Hannagan, an analyst at Alaron Trading.

 

"Historically, during the last two weeks of February and the first two weeks of March, we seasonally see soybean prices decline as the reality sets in that another big crop is coming out of South America," he added. "They don't store crops there, so we (U.S.) tend to lose our market share."

 

In overnight screen trade, the e-cbot March soybean contract settled down 2 1/4 cents at US$5.80 a bushel. March soymeal ended down US$1.20 a short tonne at US$179.30, and March soyoil closed down 0.17 cent at 22.10 cents a pound.

 

A close above US$6.10 in the CBOT March contract would provide the bulls with fresh upside technical momentum while a close below last week's low of US$5.85 would provide the bears with some fresh downside technical momentum, a technical trader said.

 

First resistance for March soybeans was seen at US$6.00 and then at US$6.05. First support was put at US$5.90 1/2 - Friday's low - and then at US$5.85 - last week's low.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended Feb. 7 decreased short holdings by 6,808 lots to hold 65,463 short positions and increased their long holdings by 267 lots to hold 58,678 long positions.

 

For CBOT soybean futures and options combined, speculators were short 64,706 lots, down 1,399 contracts from the week before, and long 59,178 contracts, down 116 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended Feb. 7 boosted short positions and turned net short. They decreased their long holdings by 430 lots to hold 20,818 long positions and increased their short holdings by 3,770 lots to hold 21,999 short positions.

 

For CBOT soymeal futures and options combined, speculators were long 21,087 lots, down 915 contracts, and short 21,606 contracts, up 3,515 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended Feb. 7 decreased their net short position, cutting short holdings by 6,103 lots to 31,806 lots and decreasing long holdings by 41 lots to 28,168 lots.

 

For CBOT soyoil futures and options combined, speculators also cut their net short position, decreasing short holdings by 6,057 lots to 31,676 contracts and increasing long holdings by 890 lots to 23,655 lots.

 

U.S. Midwest cash soybean basis bids were mostly firm early Monday, cash dealers said. Spot cash soybean bids were up 7 cents in St. Louis, steady in Sioux City, Iowa, and up 5 cents in Louisville, Ken., they noted.

 

At the Dalian Commodity Exchange, soybean futures settled slightly lower following losses at the CBOT, brokers said.

 

The benchmark September 2006 soybean contract settled RMB5 lower at RMB2,731 a metric tonne; the most-widely held May 2006 soymeal contract settled up RMB1 at RMB2,282/tonne; and September 2006 soyoil contract fell RMB25 to settle at RMB5,065/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly higher Monday in consolidation trade, brokers said. The benchmark April CPO contract ended at MYR1,467 a metric tonne, up MYR1 from Friday.

 

In Rotterdam, spot soybean prices were lower while soymeal prices were mixed, cash sources said.