December 31, 2008

CBOT January soy, soymeal deliveries seen light

Deliveries against CBOT January soy and soymeal contracts on first notice day Wednesday are expected to remain light.

Analysts expect deliveries against the CBOT January soy contract to fall in a range of zero to 400 lots, with most analysts leaning toward a range of zero to 200 lots. Soymeal deliveries are seen between zero and 100 lots, while soy oil delivery notices are expected in a range of 800 to 4,000 contracts.

As of 5 p.m. EST Monday (Dec 29), 512 soy contracts, 13,003 soy oil contracts and 75 soymeal contracts were registered for delivery at CBOT-approved warehouses.

The strength of the cash market warrants few deliveries, with exports strong and uncertainty for South American crops leaving receipt holders unwilling to risk exposing inventories, said Don Roose, president of US Commodities in West Des Moines, Iowa.

Currently, 437 soy receipts are registered in the Chicago area, and most of those beans are spoken for by domestic processors, leaving just a few receipts along the river to come out, a cash-connected CBOT floor broker said.

The January/March spread was trading at a six-cent carry at 1:25 p.m. EST Tuesday.

Soymeal is faced with a tight supply situation similar to soy, and that should limit deliveries, analysts said.

With soymeal receipts scattered in warehouses across the central US near feed lots, holders do not want to risk exposing receipts, as good buyers are waiting to acquire them, said Roose.