January 5, 2006

 

CBOT Soy Outlook on Thursday: Seen mixed; in tune with e-CBOT

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's open auction session steady, following overnight trade amid the absence of fresh market moving news.

 

Analysts call soybeans to open flat to mixed.

 

In overnight electronic trade, March soybeans were 1/2 cent lower at US$6.32 3/4, March soymeal was US$0.10 lower at US$196.80 and March soyoil was 22 points lower at 23.38 cents per pound.

 

Lingering concerns over crop conditions in Argentina and supportive technical chart formations is seen providing underlying strength, but without a healthy dose of speculative buying, consolidative activity may produce two-sided action, analysts said.

 

Technical factors will once again set the stage for near-term direction in the absence of fresh news, with traders watching for signs of fresh speculative buying interest in anticipation of new investment money flowing into the market from commodity index funds.

 

Technical analysts said market bulls are showing good technical power, with the next upside price objective resistance at the US$6.50 level. First resistance for March soybeans is seen at US$6.33 - Wednesday's high - and then at US$6.38. First support is seen at US$6.24 - this week's low - and then at US$6.20.

 

DTN Meteorlogix Weather Service said it continues to look mainly dry and hot in Argentina, with highs reaching the upper 90s or even low 100s Fahrenheit, through the next five to seven days.

 

In Brazil, mainly favorable growing conditions exist from northern Parana northward. The southern belt has adequate soil moisture at this time but this will be diminishing under a hotter and drier weather pattern for the next week or more, Meteorlogix adds.

 

Meanwhile, a total of 270 delivery notices were redelivered against the January soybean contract. The last date assigned was Dec. 30. A total of 1,650 delivery notices were posted against January soyoil. A customer account at Iowa Grain was the primary issuer at 861 lots. The last date assigned was Jan. 4.

 

CBOT reported the first deliveries against the January soymeal contract at 240 lots. Bunge Chicago issued all the notices. The last date assigned was Sept. 20.

 

In news, The Brazilian Census Bureau, or IBGE, said in their second soybean crop estimate that Brazil would harvest an estimated 59.2 million metric tonnes of soy in the 2005-06 crop, up from the 58.7 million tonnes they estimated in October 2005. IBGE also said in their report that they expect soy prices to fall because of high world stocks, a good U.S. soy harvest and high expectations for a bumper soy crop in Brazil, Argentina and Paraguay.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled higher Thursday in tandem with overnight gains in soybean futures on the Chicago Board of Trade. The benchmark May 2006 contract, which shortly hit an intraday high of RMB2,796 a metric tonne shortly after the market opened, settled RMB10/tonne higher at RMB2,785/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally lower Thursday as a recent soyoil-inspired rally fizzled. The benchmark March CPO contract ended at MYR1,435 a metric tonne, down MYR2 from Wednesday.

 

Rotterdam soybeans were mostly higher and soymeal prices were mixed, European vegoils were flat to lower.