January 5, 2007

 

CBOT Soy Outlook on Friday: Seen up 2-4 cents; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's day session on firmer footing, following the overnight theme, as futures attempt to find stability after recent setbacks.

 

Soybean futures are called to open 2 to 4 cents higher.

 

In e-CBOT trade, January soybeans were 2 3/4 cents higher at US$6.65 1/2 and March was 3 1/2 cents higher at US$6.79 per bushel.

 

The market is poised to find support on end of the week position squaring, as the market stabilizes after satisfying near term downside technical objectives in recent sessions, analysts said.

 

A quiet news front is expected to produce some choppy activity, with technicals featured once again, a CBOT floor analyst said. However, bearish South American crop conditions, a lack of fresh supportive news, weakness in outside markets and uninspiring weekly export sales are expected to keep a lid on upside potential, he added.

 

A market technician said there is now the specter of a bearish head-and-shoulders top reversal pattern forming on March soybean's daily bar chart. The next upside price objective is to close prices above solid resistance at US$7.00 a bushel. The next downside price objective is closing prices below solid support at the December low of US$6.57 1/2.

 

First resistance for January soybeans is seen at US$6.80 and then at US$6.85. First support is seen at Thursday's low of US$6.72 1/2 and then at US$6.70.

 

The U.S. Department of Agriculture said net weekly export sales for soybeans were 349,800 metric tonnes. Trade estimates called for commitments in the 400,000 to 700,000 tonne range. The biggest buyers were China, buying 230,500 tonnes, and Germany, buying 157,000 tonnes.

 

Soymeal sales were 72,600 tonnes. Analysts' estimates called for commitments in a range of 50,000 to 100,000 tonnes. Soyoil 2006-07 sales were 4,700 tonnes. The trade guess was zero to 10,000 tonnes.

 

In other demand news, Taiwan's Breakfast Soybean Procurement Association, or BSPA, Friday rejected all the bids in a tender to purchase up to 60,000 metric tonnes of U.S. or South American soybeans, an association official said.

 

The DTN Meteorlogix weather forecast said the next chance for scattered shower activity in Argentina appears to be next Wednesday, but no significant concerns have been raised at this time. In Brazil, scattered rains and cooler temperatures will maintain favorable conditions for soybeans, Meteorlogix reports.

 

In deliveries, a total of 214 delivery notices were posted against January soybeans. The last trade date assigned was December 29. The house account ADM Investor Services principle issuer of 165 lots. 665 delivery notices were posted against the January soyoil futures. The last trade date assigned was Jan. 3. Customer accounts at UBS Securities and RJ O'Brien were the primary stoppers of 273 and 196 lots respectively. Soymeal delivery notices totaled 30 lots, with the house account at Bunge Chicago stopping all 30 lots. The last trade date assigned was Dec. 28.

 

Rotterdam soybeans were lower and soymeal were flat to higher. European vegoils were lower.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled slightly lower Friday on Thursday's losses in CBOT soybean futures, analysts said. The benchmark May 2007 contract fell RMB1 to settle at RMB2,828 a metric tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply higher Friday as concerns about potential floods developing over the weekend and short-covering helped the market recover from recent heavy losses. The benchmark March CPO contract ended up MYR42 at MYR1,961 a metric tonne.