March 15, 2006
CBOT Soy Review on Tuesday: Soybeans up; soyoil down on NOPA, spread
Chicago Board of Trade soybeans ended firm Tuesday on light speculative buying after technical support held in May soybeans at Friday's six-week low of US$5.79, brokers said.
Commercial buying and a realigning of the popular CBOT soyoil/meal spread supported CBOT soymeal, despite lingering concerns about possible lower U.S. soymeal demand amid the spread of bird flu, they said.
CBOT soyoil was pressured by a continued realignment of the CBOT soyoil/soymeal spread, a buildup in February soyoil stocks among National Oilseed Processor Association members and India's boost in its soyoil base import price, they noted.
CBOT soyoil gained on CBOT soymeal futures earlier this year on concerns that bird flu will decrease the demand for U.S. soymeal, prompting a cut in U.S. soybean crush that would make soyoil less available even as U.S. biodiesel demand is thought to increase.
CBOT May oil share ended Tuesday at 40.19%, correcting from Monday's 40.48% and Friday's 40.94%, and the May crush was at 60 cents.
CBOT May soybean futures settled Tuesday up 3 1/4 cents at US$5.87 3/4 per bushel.
CBOT May soymeal closed up US$1.80 at US$176.10 per tonne and CBOT May soyoil closed down 0.04 cent at 23.67 cents per pound.
In CBOT soybean futures pit trade, ABN Amro was an early seller of 500 May, Tenco Inc. sold 200 May, Merrill Lynch bought 200 May and the speculative arm of JP Morgan bought 300 May, brokers said. The commercial arm of JP Morgan bought 400 May and Bunge Grain bought a net 100 May, they noted.
In Tuesday's soybean spread trade, R.J. O'Brien spread 250 March/May, Citigroup spread 200 July/November and O'Connor and Co. spread 200 November/September, brokers said.
In fresh fundamental news Tuesday, NOPA reported its members crushed 130 million bushels of soybeans during February, slightly below the average analyst expectations of 130.25 million.
NOPA soyoil stocks at the end of February totaled 2.316 billion pounds, above analysts' expectations of 2.215 billion pounds, with the yield racing to 11.73 pounds per bushel.
The building harvest of a projected-record South American soy crop and lingering concerns about a possible reduction in U.S. soymeal demand due to the global spread of bird flu also limited buying interest in CBOT soy on Tuesday, brokers said.
Registrations of Brazilian soybean exports for market year 2006-07 are at 26% of the estimated 57.6 million metric tonne harvest as of Feb. 28, according to government figures released by the Brazilian Vegetable Oils Industry Association, or Abiove, on Tuesday.
Last year at this time, 18.1% of the estimated 52.6 million tonne soy crop was registered in market year 2005-06. In market year 2004-05, however, Brazilian farmers had already registered 55.7% of their 50,085 million tonne soy harvest.
U.S. soy export business was quiet Tuesday while midday U.S. Gulf soy basis bids firmed 2 cents, cash sources said.
In other soy export news, Taiwan's Breakfast Soybean Procurement Association, or BSPA, on Tuesday bought 60,000 metric tonnes of Brazil-origin soybeans.
CBOT South American soybean futures ended mixed Tuesday. The CBOT SAS May futures settled up 6 cents at US$6.03 per bushel.
In other news, CBOT March soybean and product futures expired at midday Tuesday, with CBOT March soybeans up 1 1/4 cents at US$5.74 3/4 per bushel; March soymeal down 70 cents at US$172.00 per tonne; and March soyoil down 0.17 cent at 23.31 cents per pound.
Thursday is the last day to deliver against CBOT March soy futures.
There were 295 deliveries posted Tuesday against CBOT March soybeans, with the Term Commodities house account stopping 100 lots, brokers noted.
CBOT soybean registrations as of late Monday fell to 3,785 from Friday's 3,836 lots.
There were 337 deliveries posted Tuesday against CBOT March soyoil, with a customer of Banc of America stopping 313 lots.
There were 34 soymeal deliveries posted.
CBOT soyoil registrations rose on Monday to 6,458 from the previous day's 6,413 lots and soymeal registrations were unchanged at 34 lots.
CBOT soymeal futures ended higher Tuesday, with the nearby five contracts up US$1.80 to US$2.20 per tonne, buoyed by commercial and light speculative buying, brokers said.
Concerns about U.S. soymeal demand amid the global spread of a deadly strain of bird flu lingered, but traders focused on realigning the relationship between soymeal and soyoil, sources said.
In CBOT soymeal trades, Fimat bought 300 May, Calyon Financial bought 200 May, commercial Term Commodities bought 200 May and 200 July, and commercial Bunge Grain bought 300 July and 100 May, brokers said. I-Cap sold 300 May, they noted.
Soyoil futures settled lower Tuesday, with the nearby five CBOT soyoil contracts down 0.01 cent to 0.08 cent per pound on profit-taking in the soyoil/soymeal spread and pressure from India's lifting of its base soyoil import price.
Key vegetable oil importer India cut the base import price of crude palm oil to US$434 a metric tonne from US$437/tonne and raised the base import price of crude soyoil has been increased to US$537/tonne from US$524/tonne.
India's federal government sets base import prices for palm and soyoils, with import duties calculated from these prices regardless of the actual price at which importers buy the commodity.
The Ministry of Finance generally issues notifications twice every month about changes in base import prices of edible oils, even if the base prices remain unaltered. The government doesn't provide reasons for making price changes, though market participants say shifts in base prices usually reflect, at least to some extent, fluctuations in international edible oil prices.
In Tuesday's CBOT soyoil trades, speculative funds were light net sellers while commercials traded both sides, brokers said. Commercial Bunge Grain bought 300 May, ADM sold a net 100 May and ADM bought 100 May, they noted. Rosenthal Collins bought 200 May, Rand Financial sold 200 May and 100 July and Fimat bought 100 May and sold 100 July, they noted.