20000106

CBOT soya ends strong on funds, weather uncertainty

CHICAGO: Soyabean futures at the Chicago Board of Trade surged late Tuesday and ended at the highest levels in nearly two weeks, sparked by fund buying and uncertainty over weather in the South American soyabean belt.

Soyabeans settled 5-1/2 to 7-3/4 cents per bushel higher, with March up 7 at $4.71-1/2, the contract's highest close since $4.74-1/4 on Dec. 23. Late gains in the soya complex were led by soyameal, traders said. Funds bought at least 1,000 soyabean contracts on the day.

Fluctuating weather patterns in South America, and the varying trade interpretations of those patterns, continued to keep the soya complex seesawing.

Outlooks for rain this week in dry areas of Brazil helped send soyabeans lower Monday, but on Tuesday forecasts were slightly drier, traders said.

South America's soyabean crop also is in its very early stages, meaning the market should maintain some "weather premium" in case problems develop, traders noted.

"I think we still have some concern over weather," said Mark Weidner, grain and oilseed analyst for Cargill Investor Services in Chicago. "Some forecasts look to be drier short-term, while others have rain over the weekend."

Weidner said the was outlook for Rio Grande do Sul -- one of Brazil's top soyabean states -- was key for market direction. That state and nearby areas have had below-normal precipitation since soyabean planting began about two months ago, putting crops under stress. Argentina's crop belt has also suffered from dryness.

Brazil and Argentina are the world's second- and third-leading soyabean producing nations behind the United States.

John Dee, agricultural meteorologist with Global Weather Monitoring, said that after some scattered rains Tuesday, dry weather was expected across the majority of Argentina and southern and central Brazil for the rest of the week. Much of that region has had less than 50 percent of average precipitation over the past three weeks, he said.

"These weather conditions are likely bringing stress to the crops," Dee said. "Rains are needed soon in these areas to ease the concern for yield losses due to the stress."

The latest Commitments of Traders reports from the Commodity Futures Trading Commission released Monday indicated that speculative commodity funds recently reduced a net long position in the soyabean market, traders said. The CFTC said that as of Dec. 28, noncommercial interests, which are primarily funds, held 23,338 long positions in soyabean futures and 17,936 shorts, for a net long of 5,402. As of Dec. 14, the net noncommercial long was 6,348 contracts.

Despite Tuesday's gains, the soyabean market remained in a longer-term weak pattern technically, analysts said.

"Trends in Soyabeans are mixed to down with objectives of $4.50 and $4.08 March," said Jack Scoville, broker/analyst for Price Futures Group, in a report Tuesday. He placed chart support at $4.64, $4.62, and $4.56 March, and resistance at $4.70, $4.74 and $4.76 March.

Up to the last 45 minutes of trading, Refco Inc. bought 500 March contracts, Rand Financial Services bought 300 March, Cargill Inc. bought 200 each in July and May, FIMAT Futures Inc. bought 200 each in January and March and Iowa Grain sold 300 March, floor sources said.

Soyabean futures volume during Tuesday's pit session was estimated by the CBOT at 48,000 contracts, compared to 40,463 Monday.

CBOT soyameal ends at 4-week high, soyaoil higher

CHICAGO: A late surge lifted soyameal futures to four-week highs as active commodity fund buying, technical strength and uncertainty over South American weather buoyed the market, traders said.

Soyameal futures settled $1.50 to $2.40 per ton higher, with March up $1.90 at $148.60, the contract's highest close since $150.90 on Dec. 7. Funds bought at least 2,500 meal contracts on the day, traders estimated.

Strength in meal helped pull soyaoil futures higher after the market fell to contract lows early. Soyaoil settled 0.09 to 0.13 cent per lb higher, with March up 0.12 at 15.82 cents, after notching a contract low early at 15.58.

The weather outlook for South America's soyabean belt continued to keep the CBOT soya complex on edge, traders said. On Monday, outlooks for rain in dry areas of No. 2 grower Brazil helped send the complex lower. But Tuesday's forecasts were slightly drier.

The South America's soyabean crop is still in its very early stages, meaning the market needs to maintain some "weather premium" in case problems develop, traders argued.

Dryness concerns revolve primarily around Rio Grande do Sul -- one of Brazil's top soyabean states. That state and nearby areas have had below-normal precipitation since soyabean planting began about two months ago, putting crops under stress. No. 3 Argentina's crop belt has also suffered from dryness.

"Dry, warm weather is unfavourable for developing soyabeans in Rio Grande do Sul, where moisture is low and rain is needed," Weather Services Corp. said in a report Tuesday. "The next threat of rain here does not appear to be until next week.

Technically, soyameal futures appeared stronger after recently moving above some of the key chart levels funds follow, such as moving averages, analysts said.

"We are fairly close to the 100-day moving average," said Mark Weidner, grain and oilseed analyst for Cargill Investor Services in Chicago. "It's more of a technical play."

At Tuesday's close, the 100-day moving average for March meal was roughly $149.50, while the 50-day was $147.30.

Soyaoil was burdened early by continued weakness in prices for Malaysian palm oil, which competes with US soyaoil for export business.

Palm oil remained under pressure after India last week raised its import duty on refined edible oil to 27.5 percent from 16.5 percent. Such an increase could curb Indian demand for vegoils, traders said.

Funds were estimated to have sold about 1,000 soyaoil contracts up to the last 45 minutes of trading, but commercial firms were light buyers. In meal, colder weather in central United States was considered supportive as the lower temperatures could stimulate demand for livestock feed.

Up to the last 45 minutes of trading, Rand Financial Services bought 600 March meal contracts, O'Connor & Co. bought 700 March, ABN AMRO Inc. bought 300 March and ADM Investor Services and Produce Grain each bought 200 March, floor sources said.

In soyaoil, R.J. O'Brien sold 900 March, Refco Inc. sold 700 March and Salomon Smith Barney Inc. bought 200 March, 200 May and 300 January.

Soyameal futures volume during Tuesday's pit session was estimated by the CBOT at 20,000 contracts, compared with 11,865 Monday. Soyaoil volume was estimated at 27,000 contracts, compared with 17,965 Monday.

CBOT wheat ends steady-off on Pakistan, fund sales

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade ended mostly steady to lower Tuesday as Australia beat out the United States to secure a tender by Pakistan, traders said.

Commodity fund selling also pressure the market, they said.

CBOT wheat futures settled 1-1/4 cents per bushel lower to 1/4 higher, with March off 1/4 at $2.47-1/4.

Funds sold 2,300 contracts. The market was also weighed down by beneficial crop weather in the US Plains winter wheat region that last week saw temperatures climb into the 60s and 70s degrees Fahrenheit.

The market was depressed for most of the session, but a late rally in soyabeans coupled with commercial buying helped wheat futures pare losses.

"Pakistan's buying of the wheat from Australia did weaken the market although it was soft white wheat," said analyst Bob Lekberg of Goldenberg Hehmeyer.

A Pakistan embassy spokesman in Washington told Reuters at the market's open Tuesday that Pakistan bought 500,000 tonnes of Australian soft white wheat for January and February shipment.

"Australia was the cheapest in terms of freight," he added.

Speculation had been rife that Pakistan would award the tender to Australia instead of the United States in a repeat of its November tender for 500,000 tonnes of soft white wheat.

"It does not come as a big surprise," said Don Roose, president of US Commodities.

The tender result also highlighted the stiff competition the United States faced in the export markets, especially from key players such as Australia and Canada.

On Monday, the US Department of Agriculture listed US export inspections of 15.012 million bushels in the week ended December 30. The tally was at the low end of trade estimates for 15 to 23 million bushels.

Lekberg said that the wheat market was also pressured by snowfall on Monday over much of the key winter wheat producing state of Kansas.

Weather Services Corp. said six to 12 inches of snow fell in parts of south-central Kansas, while 1 to 3 inches was measured in western and northern areas of the state.

The snow, in addition to protecting the crop from temperatures that fell to the single digits degrees Fahrenheit early Tuesday, will also provide the wheat crop with some needed moisture, WSC meteorologist Joel Burgio said. R.J. O'Brien sold 1,000 March contracts, ING Futures, O'Connor each sold 500 March, FIMAT Futures sold 500 March, bought 2,100 March, Cargill Inc. bought 600 March, Term Commodities bought 400 March, 400 May.

CBOT wheat futures volume was estimated by the CBOT at 25,000 lots, compared with 16,571 traded on Monday.

Wheat options volume was estimated at 5,000.

CBOT corn ends higher on recovery, soya strength

CHICAGO: Corn futures at the Chicago Board of Trade ended higher on Tuesday in a recovery from Monday's slump, spill-over support from a rally in soyabeans and commercial buying, traders said.

CBOT corn settled 3/4 to 2-1/4 cents per bushel higher, with March up 2-1/4 at $2.03.

On Monday, heavy commodity fund selling pushed corn futures 1-1/2 to 3-3/4 cents lower, with March off 3-3/4 at $2.00-3/4, its lowest close since touching $2.01-1/2 on Dec. 17.

"There was some commercial interest in corn today after the sell-off yesterday by funds," said analyst Bob Lekberg of Goldenberg Hehmeyer.

The market was also strengthened by a rally in soyabeans fuelled by fund buying and renewed concern over the weather in Brazil and Argentina, the world's second and third largest producers after the United States.

There was also concern over the state of the corn crop in Argentina, a major corn producer and exporter.

"There is some concern over the crop in South America, which is in the pollination stage, because of the dry weather," said Don Roose, president of US Commodities.

Weather Services Corp. on Tuesday said corn areas were too dry in Argentina, and that high temperatures this week would likely have some impact on the pollinating crop.

But light rain showers were seen over the next 24 to 48 hours and over the weekend, the WSC said.

CBOT traders said some of the strength in the corn market was also due to slow farmer selling in US cash markets, which reduces hedge pressure.

On the export front, there was news from Asia that the Korea Corn Processing Industry Association has invited tenders to buy 105,000 tonnes of Argentina or US corn on Wednesday.

Open interest in corn futures rose an estimated 7,420 contracts after Monday's session. Traders said the increase suggested funds were establishing new short positions.

The latest Commitments of Traders reports from the Commodity Futures Trading Commission released Monday indicated that speculative commodity funds recently reduced a net short position in the corn market, traders said.

The CFTC said that as of Dec. 28, noncommercial interests, which are primarily funds, held 56,727 short positions in corn futures and 54,550 longs, for a net short of 2,177. As of Dec. 14, the net noncommercial short was 13,451 contracts.

Term Commodities bought 1,000 March contracts, Cargill Inc. bought 500 March, 400 December, ABN Amro sold 400 March, Carr Futures sold 500 July, Cargill Investor Services sold 600 March, Refco Inc. bought 400 March.

In options, Cargill bought 1,000 Decmber $2.90 calls.

Corn futures volume was estimated by the CBOT at 45,000 lots, compared with the 63,618 lots traded Monday.

Corn options volume was estimated at 10,000 lots.-Reuters