January 11, 2006

 

CBOT Soy Outlook on Wednesday: Mixed; positioning ahead of USDA reports

 

 

Soybean futures on the Chicago Board of Trade are seen starting Wednesday's trading session mixed, as traders attempt to even up positions ahead of the plethora of crop data scheduled for release Thursday.

 

U.S. Department of Agriculture is scheduled to release its annual crop production, supply and demand and quarterly grain stocks reports Thursday 7:30 a.m. CST (1330 GMT).

 

In overnight electronic trade, March soybeans were 1/4 cent lower at US$5.88 3/4, March soymeal was US$0.40 higher at US$182.80 and March soyoil was 6 points lower at 22.37 cents per pound.

 

Trade positioning ahead of the Thursday's crop reports is expected to dominate action, with traders remaining on guard for potential fund or index fund activity to provide brief jolts in prices, analysts said.

 

Nevertheless, definitive talk of rains moving into the driest areas of South American soybean growing areas and expectations for bearish supply and use estimates in Thursday's reports are expected to keep a defensive theme in the market. However, oversold conditions may provide a slight recovery in prices after a four day slide that produced losses of over 40 cents in the most active March future, traders added.

 

Technical analysts said near-term chart damage has occurred recently and it will take a close back above US$6.10 to fill Monday's big downside price gap and repair some chart damage. First resistance for March soybeans is seen at US$5.96 1/2--Tuesday's high--and then at US$5.99--this week's high. First support is seen at US$5.85--Tuesday's low--and then at US$5.79.

 

DTN Meteorlogix Weather Service said a frontal boundary will become nearly stationary over Argentine growing regions with tropical moisture flowing down from the north over the next few days. This will allow for a significant rainfall event for the corn and soybean belt during the period Thursday-Sunday ending the stressful pattern they have seen during the past few weeks.

 

Meanwhile, a total of 777 delivery notices were redelivered against the January soybean contract. The primary issuer was a customer account at Century Group Div of Man Financial with 353 lots. Stopper were scattered among various commission houses. The last date assigned was Jan. 10.

 

A total of 816 delivery notices were posted against January soyoil. Customer accounts at Century Group Div. of Man Financial were the primary issuer at 328 lots and stopper with 286 lots. The last date assigned was Jan. 10.

 

In news, China's soybean imports rose 31.4% on year in 2005 to 26.59 million metric tonnes, according to the General Administration of Customs' Web site Wednesday.

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled lower Wednesday following overnight losses in soybean futures on the Chicago Board of Trade. The benchmark May 2006 soybean contract settled RMB12 lower at RMB2,712 a metric tonne after trading between RMB2,701/tonne and RMB2,722/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower Wednesday amid concerns about high stocks and uninspiring consumer demand. The benchmark March CPO contract ended at MYR1,417 a metric tonne, down MYR6 from Monday after moving between MYR1,410 and MYR1,425/tonne.

 

Rotterdam soybeans and soymeal prices were mostly lower, European vegoils were lower.