Soy Traders Most Bullish Since March as Drought Cut Crops (Source: Bloomberg)
Soybean traders are the most bullish in seven weeks as drought damage to crops in Argentina and Brazil boosts demand for supplies from the U.S., the biggest producer of the oilseed. Sixteen of 24 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since March 16. Soybeans futures reached $15.125 a bushel this week, the highest since July 2008. Hedge funds are making the biggest bet on rising prices since at least June 2006, data from the Commodity Futures Trading Commission show. The U.S. Department of Agriculture has announced daily sales of at least 100,000 metric tons of soybeans 10 times since the start of April, dominated by purchases from China. Archer Daniels Midland Co., the largest grain processor, told analysts this week that it would be “difficult to buy beans going forward” because of declining South American exports.
“As the soybean supply in Brazil is running out, that is forcing the Chinese to return to the U.S.,” said Chris Gadd, an analyst at Macquarie Group Ltd. in London. “You’d expect to see continued strength in U.S. exports.”
Soybean Complex Market Recap (Source: CME)
July Soybeans finished down 11 1/2 at 1473 1/2, 15 1/4 off the high and 8 up from the low. November Soybeans closed down 1/2 at 1367 3/4. This was 5 3/4 up from the low and 6 off the high. July Soymeal closed down 3.3 at 426.4. This was 2.0 up from the low and 4.7 off the high. July Soybean Oil finished down 0.55 at 54.16, 0.7 off the high and 0.14 up from the low. July soybeans closed moderately lower while November closed just a bit lower on the session. Long liquidation selling from fund traders was active for much of the session with plenty of talk that fund traders own a record high net long position in both soybeans and meal by a significant margin. This, along with the key reversal yesterday has attracted profit-taking ahead of next week's Supply/demand update. After a very bullish weekly sales report, the market was expected to open higher but ideas that the China buying is near complete for now and a negative tilt to outside market forces and weather helped to pressure the market early. December meal recovered from lower on the session to close near unchanged as well while December oil pushed sharply lower on the day to experience the lowest close since March 29th. Palm oil futures in Malaysia were down 2.4% overnight to help pressure oil. Weekly export sales for soybeans came in at 598,000 metric tonnes for the current marketing year and 1.134 million for the next marketing year for a total of 1.732 million tonnes. Traders expected near 1.3-1.5 million. Cumulative old crop soybean sales stand at 96.9% of the USDA forecast versus a 5 year average of 95.4%. Sales of 60,000 tonnes are needed each week to reach the USDA forecast. Meal sales were 59,000 metric tonnes for the current marketing year and 92,700 for the next marketing year for a total of 151,700. Cumulative soybean meal sales stand at 78.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 75.7%. Sales of 76,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 14,900 metric tonnes for the current marketing year and none for the next marketing year for a total of 14,900. Ideas that China could soon shift to using more government-own reserves helped to pressure the market some today. Private exporters reported the sale of 232,000 tonnes of US soybeans to China for the 2012/13 season.
Market Recap: Soybean Futures (Source: CME)
Soybean futures were choppy amid bull spread unwinding. Old-crop futures ended around 11 to 13 cents lower, with September down 9 3/4 cents. November closed 1/2 cent lower, with 2013 contracts closing 1 1/4 to 10 cents higher. Meal finished mostly weaker, with soyoil lower on spillover from sharp losses in crude oil futures. Old-crop soybean futures saw spillover from yesterday's losses, with July posting a downside day of trade following yesterday's key bearish reversal, although it finished off the daily low.
VEGOILS-Palm oil touches 6-week low on global economic woes
SINGAPORE, May 3 (Reuters) - Malaysian palm oil futures extended losses to a 6-week low, as disappointing economic data from the United States and Europe cast doubts on global economic recovery and commodity demand.
"It's very much the global sentiment. Fundamentally palm oil is still bullish because supply is still facing issues. The tree stress is already confirmed, so the next catalyst will be the Malaysian Palm Oil Board numbers," said Alan Lim, research analyst with Kenanga Investment Bank in Malaysia.
Indonesia soybean output seen down next 2 yrs-attache
May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"Indonesia's soybean self sufficiency program has been challenged by limited yield improvements and decreased harvesting area in the past three years. Soybean production is expected to continue declining over the next two marketing years.
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