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James Bull
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Posting #11: Fri Feb 15th, 2008 17:29 |
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Pre-Opening Soy Complex Market Report for 2/15/2008
March soybeans traded 13 1/2 cents higher overnight. Malaysian palm oil was up 33 points overnight to a new all-time high and was up as much as 93 points at the highs. Outside markets are a slightly positive this morning.
March soybeans managed a new contract high overnight on the heels of another surge to new all-time highs for oil and palm oil. Palm oil exports from Malaysia for the February 1st to 15th time frame hit 630,389 tonnes from 394,395 tonnes for the same period in January. China demand is thought to be behind the buying, as damage to the China winter rapeseed crop and a continued battle to keep inflation down may have sparked more aggressive buying from China. Traders also believe China is in the world market for soybeans and soybean oil. China imported 3.44 million tonnes of soybeans in January, which was up 41.5% from last year and up 17.6% from December. There is some concern by traders that slow meal demand due to poultry losses from the storm could help slow soybean imports in February. Reports that more than 40% of China's rapeseed crop was affected by the cold weather helped spark the recent strength. As somewhat of an offset, China officials point out that planted area was up sharply and that only 6% of the total rapeseed acreage would have no harvest. Funds were noted buyers of nearly 7,500 soybeans contracts, 5,500 oil and 3,000 meal on the session yesterday. A surge higher in palm oil on concerns for damage to the China rapeseed crop along with strong cash markets for soybean oil in Brazil and Argentina helped support the higher opening and fund buying emerged to provide additional support. Weekly export sales for soybeans came in at 331,600 tonnes, which was below trader expectations but compares with 99,700 tonnes necessary each week to reach the USDA projection for exports for the 2007/08 season. Cumulative sales have reached 89.3% of the USDA forecast for the season as compared with the 5-year average of 82.2% sold at this time of the year. Meal sales were 122,300 tonnes, in line with expectations, and oil sales were 24,000 tonnes, which was also in line with trade expectations. Cumulative oil sales have reached 75.9% of the forecast for the season as compared with 45.8% on average for this time of the year. The NOPA crush for January was 152.439 million bushels, which was below trade estimates. Oil stocks were pegged at 2.818 billion pounds from 2.712 billion in December.
Hot and dry weather is expected for southern Brazil into early next week before more rains develop. Some models show heavier rains for the central growing region for later next week, which would delay harvest. Gulf basis bids were steady.
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James Bull
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Posting #12: Wed Feb 20th, 2008 02:03 |
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Pre-Opening Soy Complex Market Report for 2/19/2008
March soybeans traded 24 3/4 cents higher overnight and to a new contract high. Malaysian palm oil was up 26 points overnight to a new all-time high and was up as much as 47 points at the highs. Outside markets are a positive force this morning.
The market managed new all-time highs again overnight for soybeans and oil, as increased rains for the wet areas of central Brazil and continued firm demand from China lent support. China is expected to continue to buy soybean oil and soybeans on the world market in an attempt to build government reserves. There were rumors that China bought up to 50,000 tonnes of soyoil last week, and traders believe they want to buy near 200,000 tonnes total to add to reserves for now. In the long run, industry traders believe China will build oil reserves to near 1.5 million tonnes as a tool to combat inflation. China consumes near 25 million tonnes of vegetable oil per year. In an attempt to downplay the rapeseed freeze, China officials claim that total rapeseed output for 2007 will fall just 200,000 tonnes short of 2007. While believing the freeze caused near 1.7 million tonnes in damage to the rapeseed crop, the surge in planted area is expected to offset much of the weather loss. Indonesia palm oil output is expected to reach 19.8 million tonnes this season from 17.37 million in 2007, according to a senior trade official. Exports, however, may reach just 9.41 million tonnes from 10.44 million in 2007 due to increasing domestic usage. China demand has also helped drive palm oil to new all-time highs. While there were a few days of good harvest weather recently in central and northern Brazil, conditions look too wet as the week progresses and areas of the south look too dry to benefit filling soybeans. Talk that the planted acreage battle could heat up in the weeks ahead due to high-priced spring wheat helped support the market late last week. A surge higher in wheat added to the positive tone, and the trade remains concerned that China will remain an active buyer of vegetable oils on the world market due to rapeseed crop concerns and continued inflationary fears. China imported 3.44 million tonnes of soybeans in January, which was up 41.5% from last year and up 17.6% from December. There is some concern by traders that slow meal demand due to poultry losses from the China winter storms could help slow soybean imports in February. The Commitment of Traders report with options showed the market in a positive setup, but the overbought condition of the market and the selling trend of the trend-following funds could be considered a caution flag for the bulls. Trend-following fund traders reduced their net long position by 3,420 contracts for the week to 114,355 contracts. Index funds, however, were buyers of 1,667 contracts to push their net long position to 192,657 contracts. Non-commercial traders (funds) were net buyers of 3,390 meal and 1,571 oil contracts to push the net long to 44,107 contracts of meal and 32,948 contracts of oil.
The southern areas of Brazil and parts of Argentina look hotter and drier this week, but central Brazil looks to return to above normal precipitation, which should slow harvest and leave crops in some areas vulnerable to problems. Gulf basis was steady with talk that China bought 100,000-200,000 tonnes from the US and additional soybean purchases from South America.
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The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #13: Wed Feb 20th, 2008 17:30 |
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Pre-Opening Soy Complex Market Report for 2/20/2008
March soybeans traded 3 1/4 cents lower overnight. Malaysian palm oil was up 32 overnight to another all-time high.
China and the US inflationary pressures appear to be on the rise, and fund traders turned aggressive across the board yesterday. Vegetable oil tightness and the need to build a reserve of soybeans and vegetable oils have helped provide fundamental support to the surge to new all-time highs for soybeans and oil prices yesterday. There were rumors that China has bought more than 10 cargoes of South American soybeans and near 100,000 tonnes of soybean oil in the past week. China pegged damage from the recent storms at 1.7 million tonnes, but production is expected to slip just 200,000 tonnes from last year, due to a surge higher in planted area. Harvest of the potential record-high Brazil crop should pick up steam in the weeks just ahead, and traders are waiting to see if the new supply from both Argentina and Brazil might ease tightness on the world market. Parana, Brazil's second largest producing region is thought to see harvest only near 2% complete, as compared with 5-10% harvested by this time last year according to state Agriculture officials. Nearby oil priced over 60 cents/lb and strong demand for soybeans, despite record high prices, helped attract increased buying from funds yesterday, and record high crude oil prices and sharply higher gold prices also added to the bullish tone. A surge higher in many commodity markets on ideas that the Fed will need to concentrate on growth and let inflation surface added to the bullish tone. Soybeans and oil managed new contract and all-time highs. Brazil center and northern growing areas have had better weather for harvest for a few days, but periods of above normal precipitation for the next week could slow progress again. Soybean weekly export inspections came in at 32.95 million bushels (more than half headed for China), which was above trade expectations and compares with just 11.6 million bushels necessary each week to reach the USDA projection.
Scattered showers in the forecast for the central part of Brazil through the weekend could slow the harvest. Gulf basis held steady at the gulf despite a move to new all-time highs for futures with talk of firm demand from China.
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The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #14: Thu Feb 21st, 2008 16:56 |
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Pre-Opening Soy Complex Market Report for 2/21/2008
March soybeans traded 14 cents higher overnight. Malaysian palm oil was up 78 points overnight (up 2.1%) to another new all-time high for the 6th session in a row. Outside market forces were mostly positive.
China demand for vegetable oil and soybeans on the world market seems to be the foundation for the recent run to new all-time highs for soybeans and soybean oil. Palm oil is also marching higher, as strong demand from China to build reserves as a tool to combat food inflation has helped support. Traders believe that some of the late strength yesterday was due to positioning ahead of the USDA Annual Outlook Conference which could provide updated guesses for planted area, production and demand for the coming season. Given the tight ending stocks of only 160 million bushels and continued strong demand from China, it will be important to see both higher planted area and good yield to avoid potential tightness into the 2008/09 season. Argentina officials yesterday pegged the 2007/08 soybean crop at 45-48 million tonnes as compared with the 47 million posted in the last USDA world supply/demand report. Funds were light buyers of soybeans and sellers of meal yesterday and noted buyers of near 3,000 soybean oil contracts, which helped drive the market to new all-time highs. US broiler exports in 2007 totaled 2.6 million tonnes, which was up 10% from 2006 and suggests continued expansion of the US poultry herd as a cheap dollar and growing world protein demand support. This is a positive sign for meal demand. The South America weather looks mostly non-threatening, and drier weather into the weekend could spark increased harvest progress. Gulf traders see a significant slowdown in China buying as South American soybeans appear cheaper for April/May shipment and there are rumors of China booking 10 cargoes from South America this week.
Brazil harvest could pick up over the next few days, but there is some concern for a return to more active weather systems next week. Gulf basis was a little lower due to a lack of near term demand for US soybeans.
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The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #15: Sat Feb 23rd, 2008 10:12 |
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Pre-Opening Soy Complex Market Report for 2/22/2008
March soybeans traded 3 1/2 cents higher overnight. Malaysian palm oil managed to move to a new all-time high for the 7th session in a row but closed 4 points lower on the day.
The surge higher in soybeans this week leaves futures in an overbought condition into a period where harvest could increase in South America. While the longer term fundamentals for the soyoil and palm oil remain bullish, the extremely overbought technical condition and the reversal-action in palm oil overnight might be seen as a caution flag by many technical traders. China and India buying and fears that Indonesia will slap on an export tariff for palm has helped support the historic bull run. In addition, there is talk that India may cut import duties. Weather appeared to be a short term negative factor this week as harvest picked up steam in South America, but rains are in the forecast for the weekend and early next week, which might slow progress. Volume was light for meal but heavy in the oil pit with funds noted buyers of near 4,000 oil and 2,500 soybean contracts. Weakness in the stock market and the energy market yesterday may have been seen as a limiting factor. Another new all time high for palm oil and ideas that China is aggressively buying soybeans and soybean oil on the world market helped support the strong gains early in the trading session. New highs in gold, a weak US dollar and inflationary fears in the US and in China added to the positive tone. Ideas that India may cut import duties on vegetable oils was also seen as a positive force to drive soybean oil to a new all-time high, and this helped pull soybeans to a new all-time high as well. China imported 150,000 tonnes of soyoil in January vs. 190,000 tonnes last year. The USDA Annual Outlook Conference news that planted area for the coming season will be near 71 million acres, unchanged from the baseline projections of February 12th was seen as neutral. Traders will monitor weekly export sales today to get an indication when demand might begin to shift to South America.
The chances of more widespread rains for central and northern growing areas of Brazil for the weekend and early next week could slow harvest. Dryness in the south is not ideal but should not be too much of an issue. Gulf basis was steady, but cash dealers sense a shift in demand away from US beans and toward South America.
Weekly export sales for soybeans, released before the open, came in at 683,100 metric tonnes for the current marketing year and 77,000 for the next marketing year for a total of 760,100. Meal sales came in at 73,200 tonnes for the current year and 5,000 next, for a total of 78,200. Bean oil sales came in at 13,200 tonnes, all in the current marketing year.
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The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #16: Wed Feb 27th, 2008 13:30 |
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Pre-Opening Soy Complex Market Report for 2/25/2008
March soybeans traded 26 3/4 cents higher overnight. Malaysian palm oil surged 6% overnight to a new high, and Minneapolis wheat was up sharply to support.
Some concerns with wet weather in South America slowing the harvest and continued ideas that China will remain a strong buyer of soybean oil and soybeans ahead of the Olympics helped to support another new all time high for soybeans and soybean oil overnight. March oil moved to a peak of 63.76 overnight as compared with a February 11th low of 54.50. Funds were noted buyers of nearly 3,000 contracts for oil and soybeans on Friday and near 1,500 of meal to support the strong gains. Egypt seeks 15,000-20,000 tonnes of optional origin soybean oil for first-half April. The surge higher in Minneapolis wheat, ideas that China demand will remain strong and active fund buying pushed soybeans and soybean oil to new all-time highs and new all-time high closes for nearby futures on Friday, and March Minneapolis wheat was up as much as 98 cents overnight to a high of $20.23 per bushel. March soybeans managed to gain more than 46 cents for the week and November soybeans have not closed lower for 7 sessions in a row. Solid export demand news and continued concerns that there may not be enough planted area this season to avoid tightness helped spark solid buying support. On top of solid export sales news for soybean oil on the weekly report, the USDA announced a daily sale of 110,000 tonnes of US soybeans to China. At the USDA outlook conference, the USDA indicated an ending stock forecast for the 2008/09 season of just 169 million bushels from 160 million this season. Crop production is expected near 2.95 billion bushels. This assumes a yield of 42.1 bu/acre, but if the yield comes in at the simple 6-year average of 40.2 bu/acre, ending stocks could slip to just 37 million bushels, which would suggest supply rationing would be necessary. The USDA already has a reduced export outlook of 910 million bushels from 1.05 billion for this season. Soybean oil ending stocks were pegged at 2.158 billion pounds from 2.502 billion this season. Weekly export sales for soybeans came in at 630,600 tonnes, which was within trade expectations but closer to the low end estimates. Cumulative sales have reached 91.6% of the USDA export forecast for the season as compared with 83.5% as the 5-year average for this time of the year. Meal sales were a bit disappointing at just 80,300 tonnes. Oil sales were well above trade expectations at 27,000 tonnes with 14,500 tonnes sold to unknown destination. Cumulative sales have reached 79% of the USDA export forecast for the season as compared with 46.4% as the 5-year average for this time of the year. The Commitment-of-Traders report with options shows the market in an overbought condition but still not near extremes. Trend-following funds increased their net long position by more than 3,000 contracts, and index funds increased their net long by more than 6,000 contracts for the week ending February 19th. The buying trend is supportive. Index funds were also strong buyers of soybean oil for the week. The buying trend is supportive, but market is vulnerable to spec liquidation if support levels are violated.
Central and western areas of Brazil look to receive more hefty rain totals in the next several days, and this could be seen as supportive news for short term US exports. Gulf basis was steady. Traders believe that China has booked more than 100,000 tonnes of soybean oil in the past week from South America.
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The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #17: Wed Feb 27th, 2008 13:32 |
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Pre-Opening Soy Complex Market Report for 2/26/2008
May soybeans traded 19 1/4 cents lower overnight. Malaysian palm oil was down 74 points overnight (nearly 2%) with talk of profit-taking after gains of near 25% so far this year. Weakness in March Minneapolis wheat was seen as negative.
The lack of threatening weather in South America and talk of the extremely overbought technical condition of the market helped spark selling pressures overnight. A short term letdown in the extent of fund buying of commodities could pressure the market after the aggressive buying from funds and signs of strong demand for vegetable oils and soybeans on the world market from China has helped pull the market up $1.60 in the past 8 trading sessions. Funds were noted buyers of near 7,000 soybean contracts and 5,000 meal yesterday, and funds and commercial buyers were active with near 6,000 oil bought yesterday. Continued talk of China "needs" for more soybean and soybean oil imports and a surge higher in nearby futures in Minneapolis to a new record high for spring wheat at $24.00 per bushel helped spark the early sharp gains in the market yesterday. There was talk on the floor that China may have bought up to 25 cargoes of soybeans and 300,000 tonnes of soybean oil from the US and South America combined over the past week. Inflation fears in China and the US and continued talk of rapeseed losses in China and the need to import more vegetable oils ahead of the summer Olympics helped to support. Overnight, there was talk that China was interested in buying 300,000 tonnes of Indonesia palm oil. Rains in the central and northern growing areas of Brazil and the forecast for more this week has also helped support the market with talk that a slow harvest in Brazil could spark some increase in demand for nearby shipment soybeans from the US. Weekly export inspections, released during the session, came in at 23.8 million bushels, which was under trade expectations but well above the 11.16 million bushels per week average necessary to reach the current USDA projection. Palm oil surged to a new all-time record high and up 6% on the day, which sparked follow-through buying in soybean oil futures and new all-time highs as well. March oil has posted new highs for seven sessions in a row and posted a new high overnight before a setback.
There are some increased chances of rain for the southern growing areas which have been warm and dry recently, and this might be considered somewhat negative. Gulf basis was steady.
____________________
The only thing we learn from financial history is that we learn nothing from it!
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James Bull
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Posting #18: Wed Feb 27th, 2008 16:31 |
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Pre-Opening Soy Complex Market Report for 2/27/2008
May soybeans traded 23 cents lower overnight. Malaysian palm oil was up 72 points overnight (up 1.9%%) on talk of strong demand, but sweeping reversal-type action in wheat has the US markets concerned for the current overbought status of the grain complex. Outside market factors look supportive with a sharp break in the dollar and higher precious metals.
Traders believe that China may have bought up to 300,000 tonnes of soybean oil and 700,000 tonnes of soybeans from the US and South America over the past week, and this has been the foundation of the recent surge to new all-time highs for soybeans and soybean oil. Funds were noted buyers of near 4,000 soybean contracts and 3,000 each for oil and meal yesterday. The sharp drop in the US dollar, coupled with inflationary fears, has helped provide underlying support. Bearish technical action for US and European wheat markets overnight combined with the extremely overbought technical condition of the soybean complex leaves the market vulnerable to some long liquidation (profit-taking) selling from speculators today. While the Brazil weather appears to be a mix of too much rain in the north and good rains for dry areas in the south, the lack of a major problem with the crop and the upcoming harvest are seen as potential negative forces. After lower trade early yesterday, the surge in wheat prices and continued concerns for increased tightness for vegetable oils ahead helped support the higher close and new all-time highs for nearby soybeans and soybean oil. Nearby oil futures have now posted new all-time highs for eight sessions in a row. Talk of the overbought technical condition of the market after posting new highs in 5 of the past 6 trading sessions for soybeans helped to spark the selling pressures early in the day. A surge higher in energy prices helped support a strong recovery off of the lows, led by soybean oil. A limit-up move in wheat and continued inflationary economic fears appeared to attract more speculative buying to help support.
There are some increased chances of rain for the southern growing areas which have been warm and dry recently, and this might be considered somewhat negative. Gulf basis was steady.
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The only thing we learn from financial history is that we learn nothing from it!
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