March 1, 2006

 

CBOT Soy Review on Tuesday: Soybeans, oil end up on month-end trade

 

 

Chicago Board of Trade soybeans and soyoil ended firmer Tuesday after a choppy session on month-end fund book squaring and technical buying, despite the lack of stopping of heavy first notice day deliveries against March soybeans, brokers said.

 

Soymeal settled weaker Tuesday on concerns about the global spread of a deadly strain of bird flu and a lack of fund buying, they said.

 

CBOT May soybeans closed up 1 cent at US$5.94 per bushel.

 

CBOT May soyoil ended Tuesday up 0.60 cent at 23.97 cents per pound, and CBOT May soymeal settled down US$2.30 at US$176.10 per tonne.

 

Funds were thought to be net long about 3,700 CBOT soybean futures and 4,000 CBOT soyoil futures before Tuesday's open and net short about 6,700 CBOT soymeal futures.

 

In Tuesday's soybean pit trades, funds bought at least 3,000 lots, brokers said. ABN Amro bought 1,200 May; Calyon Financial and Tenco Inc. each bought 1,000 May; Fimat sold 600 May; and UBS sold 500 May, brokers said.

 

There were 2,771 deliveries posted on Tuesday's first notice day against CBOT March soybeans without major stoppers, matching CBOT traders' estimates.

 

"These are a lot more beans than the 930 deliveries back for FND (first notice day) for the January futures," said Bill Nelson, a grain analyst at AG Edwards & Sons.

 

"Soybeans are in plentiful supply and it is apparent the trade is not worried about having ownership of these supplies," he added.

 

Soybean contracts registered with the exchange for delivery purposes as of Monday afternoon rose to 3,859 from the previous day's 1,903 lots.

 

There were 2,076 deliveries posted Tuesday against CBOT March soyoil, with Bunge Chicago stopping 1,276 lots; no soymeal deliveries were posted Tuesday. There were 6,101 soyoil registrations, up from the previous day's 5,379, and 34 soymeal registrations, unchanged from Friday.

 

In soybean spread trade Tuesday, ADM Investor Services spread 900 July/March; Tenco Inc. spread 800 March/May; and Term Commodities spread 500 May/July, brokers said.

 

In soybean options trade, ADM bought 2,800 July US$6.00 calls and 1,700 November US$6.40 calls, they noted.

 

Midday U.S. soybean barge basis bids for the first half of March were unchanged at midday Tuesday, cash sources said.

 

CBOT South American soybean futures ended slightly higher Tuesday. The CBOT SAS May futures settled up 1 cent at US$6.18 per bushel.

 

News about Brazil's cash market was quiet due to Carnival celebrations, sources said.

 

 

SOY PRODUCTS

 

CBOT soymeal futures ended weaker Tuesday, but Monday's nearly 3-month low held in bellwether May soymeal futures. The nearby five contracts closed down US$2.20 to US$2.60 per tonne.

 

The spread of a deadly strain of bird flu in Europe and worries about a slowdown in U.S. soymeal demand continued to weigh on CBOT soymeal futures, brokers said.

 

A slowdown in U.S. poultry exports, primarily eastern Europe and the Commonwealth of Independent States, and a 4.3% increase in U.S. broiler meat production during Q4 2005 have resulted in a buildup of cold storage stocks and falling prices.

 

Cold storage stocks of broiler products at the end of December 2005 totaled 918 million pounds, up 29% from the end of 2004, the USDA said on Feb. 15. Moreover, stocks of leg quarters alone totaled 176 million pounds, up 131% from the end of 2004.

 

U.S. poultry consumed about 15.4 million metric tonnes, or about half of the 30.3 million tonnes of domestic soybeans consumed by U.S. livestock in 2004, according to the American Soybean Association.

 

In CBOT soymeal trades, ABN Amro, Calyon Financial, Prudential Financial and Tenco Inc. each sold 200 May while O'Connor and Co. bought 400 May, brokers said. Commercial Bunge bought 200 March.

 

CBOT May oil share ended Tuesday at 40.50%, and the May crush was at 57 cents.

 

Soyoil futures closed higher, with the nearby five CBOT soyoil contracts up 0.50 cent to 0.60 cent per pound.

 

In Tuesday's CBOT soyoil trades, funds bought at least 2,300 lots, brokers said.

 

Calyon Financial bought 1,100 May; Refco Inc. and R.J. O'Brien each bought 200 May; Citigroup sold 500 May and bought 100 July; Bunge bought a net 200 May; the commercial arm of JP Morgan sold 300 May; and Term Commodities sold 200 May and 400 July, they said.

 

In soyoil spread trade, Tenco Inc. and Rosenthal Collins each spread 400 March/May while Fimat and Prudential Financial each spread 300 March/May, they noted.