Soybeans resumed their decline on Thursday closing 8 ¼ cents lower after a 1 day respite. May soybeans traded to lows not seen since January 30th. Traders say that there are a number of overall bearish factors adding to the weakness in soybeans. The overall weather situation, disappointing weekly export sales, weakness in the US cash markets and a large South American harvest are all contributing to the bearishness. Yesterdays trade was a high volume trade with an estimated 199,220 soybean futures traded and 29,209 options. Oil and meal volumes were high as well with an estimated 81,650 soybean oil traded and 59,571 meal futures traded. Funds were active selling an estimated 7,000 soybeans, 3,000 meal and 3,500 oil. Commercials bought an estimated 5,000 soybean oil and some light commercial buying in soybeans and meal.
The focus remains on the current the weather situation as traders are concerned that wheat damage will be more widespread. Soybean oil is the leader in the bean complex led by surging palm oil prices. Reports from China show their outlook for soybean and soybean meal remain bearish. Chinese crushers say their outlook for soybeans is weak as crushers have slowed imports amid high meal stocks. The US dollar has reached 2 year lows today as the G7 meet in Washington. Overnight Chinese soybeans and meal closed lower. Malaysian Palm oil futures closed higher.
eCBOT Overnight
Contract Last Net Change High Low
ZSK7 737^0 -1^2 739^4 732^6
ZSN7 754^0 -2^4 756^4 749^4
ZSQ7 758^6 -3^6 761^0 758^6
ZSU7 766^4 -3^0 768^0 766^4
ZSX7 782^2 -2^2 785^0 778^2
ZMK7 200.5 -0.4 201.7 200.0
ZMN7 206.9 0.0 207.0 206.2
ZMQ7 209.0 -0.9 210.5 209.0
ZLK7 32.79 0.14 32.79 32.45
ZLN7 33.35 0.15 33.35 33.02
ZLQ7 33.28 -0.10 33.31 33.28
Early Opening Calls: 1 to 2 cents lower.
Top News
-- Argentina soybean exports were only a tiny fraction in January 6,000 mt, compared to the 701,000 mt seen year ago January. Soyoil exports also fell to 228,500 in January compared to Jan 2006 exports of 463,200 mt. The gov't report didn't have an explanation, but unofficially says exports will rebound to normal levels.
-- India vegatable oil imports over latest 6 months rose 10% when compared to year ago.
-- Funds are reportedly long 97,000 soybean contracts. 23,000 in soymeal & 82,000 in soyoil.
US Environmental Protection Agency passes ruling that would put ethanol-for-fuel plants on the same emissions standards as ethanol-for-food plants; seen as beneficial for alternative fuel expansion
-- Dalian Soybean futures lower overnight on speculative selling. Soymeal futures were lower; soyoil mixed.
-- Malaysian Palm oil futures rose overnight along with the Indonesian oil future markets.
-- eCBOT Vol. 119,211; Pit Vol. 83,090; Open Interest Change: +2,289
-- Weather shows Normal to Below Temps. Normal to Below Precip. over the next 6 to 10 days.
-- Outside markets: Energy higher ; US $ lower vs Yen & Euro; Gold & Silver sharply higher
Cash Markets
-- CIF Soybeans: Apr. +7 to +12, May. +14 to +19, June +8 to +12. July +13 to +19, Aug. +13 to +20,. Oct. +18 to +25
-- Processors: Decatur -20 Danville -23 Bloomington -20 Gibson City -20
Nathan T. Smith III
Linn Group
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