Long liquidation continued in Soybeans on Monday as the Global sell-off of equities and commodities continued. May Soybeans gapped lower and closed the gap but were unable to post a higher close. Technicians note that with this 57 cent break off the highs in May soybeans that this 50% correction coupled with yesterdays spike low could be enough for this current move to the downside. Overnight May beans gained back 3 ¼ cents and early opening calls are higher. The question on traders minds is, is this move off the highs a correction or part of a bigger move? Volume was estimated 130,271 futures traded and 30,855 options in soybeans. Fund activity was active but less then in the last 2 days. Funds sold an estimated 4,000 soybeans, 1,300 meal and 1,700 oil.
Brazil grain analyst Celeres issued a new soybean production estimate of 58 mmt vs. their Feb estimate of 57 mmt. Paraguay's Ag. Minister estimated Soybean production at a record 6.2 mmt. vs. 3.6 mmt. last year. Oil worlds estimated South America's soybean crop is likely to reach a record high of 108.8 mmt this year, up by 6.1 mil from last year due to higher yields in Argentina and Paraguay. Widespread rainfall at the end of February has created better crop conditions in Argentina. The Heavy rainfall, however has caused some crop damage in Brazil. Brazil bean harvest is 21% complete. Overnight Chinese Soybean, Meal and oil futures closed higher. Malaysian Palm oil futures closed higher.
eCBOT Overnight:
Contract Last Change High Low
ZSH7 736^0 0^2 736^0 736^0
ZSK7 753^6 3^2 755^6 749^0
ZSN7 768^4 2^6 770^2 761^0
ZSQ7 775^6 5^2 775^6 765^0
ZMK7 222.1 1.6 223.6 220.3
ZMN7 227.0 1.5 228.5 225.8
ZLH7 29.41 -0.18 30.00 29.41
ZLK7 30.02 0.04 30.04 29.86
ZLN7 30.36 -0.13 30.50 30.36
Early Opening Calls: 2 to 3 cents higher.
Early Soybean Complex Calls: Oil 5-10c higher, Meal 25-50c higher.
Top News:
-- Brazil grain analyst Celeres issued a new Soybean production estimate of 58 mmt. vs. their February estimate of 57 mmt. They also estimate the Brazilian farmer has sold 45% of the crop vs. 51% sold on this date last year.
-- Favorable weather in Brazil speeds up soybean harvesting - Celeres pegs progress at 21% of crop vs. 16% this time last year.
-- Malaysian palm oil was +1% higher overnight to $553/ton on better world markets and short covering ahead of a major conference
-- Fund activity fairly light Monday. Funds sold 4,000 Soybeans, 1,300 Meal, 1,700 Oil. Bought 2,000 Wheat. Corn even. Commercials were good buyers.
-- Asian stocks market trading higher overnight up 1 to 2%. Dow futures up 98 points. Chinese Soybean, Corn, Meal and Oil closed higher.
-- Outside Markets: Gold trading higher this morning $647.00 up $7.70, Crude Oil trading higher $60.67 up .60, The Dollar is trading higher vs. the Yen, lower vs. the Euro.
-- Soybean spreads: ABN 1,000 SX/SK, Term 500 SX/SK, Tenco 600 SH/SK, RJ 300 SK/SN
Cash Markets:
CIF Soybeans: Mar. +14 to +16, Apr. +14 to +18, May. +15 to +20, June +12 to +20. July +15 to +20, Aug. +20 to +28.
River house bids mixed STL up 1 at -19, Morris IL. River up 2 at -33.
Processors: Decatur -28 Danville -28 Bloomington -30 Gibson City -30
Board Crush Margins: Mar. 63.62 up 1.71 May 64.36 up 1.02
COMM OF TRADERS: This report is updated weekly to the CFTC report. Totals are an estimate of fund change in positions inclusive of options.
|
|
WHEAT |
CORN |
BEANS |
OIL |
MEAL |
|
COT 02/27/07 |
15,700 |
395,100 |
111,400 |
69,500 |
50,400 |
|
L.G. Est 02/27/07 |
14,500 |
340,800 |
86,000 |
73,300 |
65,100 |
|
COT w/Opt 02/27/07 |
24,300 |
346,100 |
96,200 |
69,700 |
48,500 |
|
|
|
|
|
|
|
|
Fund Activity |
|
|
|
|
|
|
28-Feb |
0 |
8000 |
3500 |
1000 |
-700 |
|
1-Mar |
-5000 |
-20000 |
-20000 |
-6000 |
-5000 |
|
2-Mar |
-1000 |
-4000 |
-6000 |
4000 |
-3000 |
|
5-Mar |
2000 |
0 |
-4000 |
-1500 |
-1300 |
|
|
|
|
|
|
|
|
Est. Fund Position |
20,300 |
330,100 |
69,700 |
67,200 |
38,500 |
|
|
|
|
|
|
|
|
record fund positions past |
46 |
395 |
111 |
81 |
57 |
|
7 years (thou contracts) |
-56 |
-129 |
-56 |
-42 |
-48 |
|
|
|
|
|
|
|
|
Index funds |
|
|
|
|
|
|
3-Jan |
201,100 |
421,600 |
129,800 |
67,900 |
|
|
9-Jan |
198,900 |
405,700 |
130,100 |
68,500 |
|
|
16-Jan |
190,200 |
368,700 |
131,300 |
66,700 |
|
|
23-Jan |
190,500 |
356,100 |
134,100 |
69,300 |
|
|
30-Jan |
191,428 |
350,009 |
133,886 |
67,655 |
|
|
6-Feb |
194,600 |
343,600 |
135,800 |
72,100 |
|
|
13-Feb |
194,600 |
344,500 |
135,500 |
72,800 |
|
|
20-Feb |
192,338 |
353,069 |
136,798 |
72,860 |
|
|
27-Feb |
194,427 |
361,720 |
135,639 |
74,454 |
|
Interesting to note the index fund longs actually grew on the weakness in wheat and corn on the first break for a while? There is talk of rebalancing more often and this could be the first indication of that?
Nathan T. Smith III
Linn Group
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss
