January 17, 2006

 

CBOT Soy Outlook on Tuesday: Down 2-4 cents, e-CBOT, South American weather

 

 

Soybean futures on the Chicago Board of Trade are seen starting Tuesday's session on weak footing, extending the overnight theme amid bearish weather conditions in South America and a lack of supportive inputs.

 

In overnight electronic trade, March soybeans were 2 3/4 cents lower at US$5.73 3/4, March soymeal was US$0.50 lower at US$181.20 and March soyoil was 5 points higher at 21.72 cents per pound.

 

Beneficial weekend rains in Argentina and forecasts for precipitation to move into southern Brazil this week is expected to cast a bearish cloud over prices, as the market attempts to find a price level that will spur consumption of record nearby supplies, analysts said.

 

DTN Meteorlogix Weather Service said scattered showers and more moderate temperatures this week will ease stress to developing soybeans in Brazil's Rio Grande do Sul. Above normal temperatures and mostly below normal rainfall in Parana and southern Mato Grosso will increase crop stress. Generally favorable conditions are expected for northern Mato Grosso.

 

In Argentina, weekend rainfall and cooler temperatures eased stress to corn and soybeans. However, it looks to be drier for most of the 7 day period with some warmer to hotter weather possible, Meteorlogix said.

 

Continued concerns over the spread of bird flu overseas and its impact of feed demand coupled with a bearishly construed December crush figure is seen aiding the lower tone.

 

Nevertheless, traders remain on guard for possible speculative buying to reemerge as index fund related interest has not followed fundamental principles in recent weeks, said a CBOT commission house broker.

 

Technical analysts said first resistance for March soybeans is seen at US$5.78 and then at US$5.83--the top of last week's downside price gap on the daily bar chart. First support is seen at US$5.69--last week's low--and then at US$5.65.

 

The National Oilseed Processors Association monthly crush for December was 142.245 million bushels, below average trade estimate at 145 million. The figure was at the low end of the range of estimates that span from 142 million to 147 million bushels. Soyoil stocks were pegged at 1.829 billion pounds, above the average trade estimate of 1.746 and above the range of estimates that span from 1.731 to 1.755 billion.

 

Meanwhile, Taiwan Sugar Corp. bought 20,000 metric tonnes of U.S.-origin corn and 15,000 tonnes of U.S.-origin soybeans from trading house Cargill in a tender concluded Tuesday, a Taipei trader said.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net long futures and options positions totaling 12,527 lots in soybeans, 13,563 contracts in soymeal while holding a net short position of 5,648 lots in soyoil as of Jan. 10.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

In overseas markets, China's Dalian Commodity Exchange soybean futures settled mixed Tuesday, with many investors continuing to shy away from the illiquid grains market to focus on volatile metals futures, traders said. The benchmark May 2006 soybean contract inched up RMB4 to RMB2,683/tonne, after trading between RMB2,665 and RMB2,698/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally higher Tuesday after a choppy, uneventful day devoid of fresh market-moving leads. The benchmark April contract ended at MYR1,432 a metric tonne, up MYR1 from Monday, after moving between a low of MYR1,426/tonne and a high of MYR1,436/tonne.

 

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