January 23, 2006

 

CBOT Soy Outlook on Monday: Up 5-8 cents on e-CBOT, South American weather

  

 

Soybean futures on the Chicago Board of Trade are seen starting Monday's open auction session firmly, in tune with overnight action, with concerns over hotter and drier long range forecasts for Argentina underpinning prices.

 

Analysts expect soybeans to open 5-8 cents per bushel higher.

 

In overnight electronic trade, March soybeans were 8 cents higher at US$5.76, March soymeal was US$3.00 higher at US$182.40 and March soyoil was 22 points higher at 21.50 cents per pound.

 

The market is poised to add to risk premium back in the market, with less than expected weekend rain in South America, private forecasters taking some rain out of Argentina's forecast along with temperatures expected to propel higher moving toward next week, analysts said.

 

Technical buying attributed to an overdue bounce following the market's recent string of losses is seen adding support, with traders pointing out that futures have held together fairly well in the face of overly bearish fundamentals.

 

Nevertheless, technical analysts said it will take a close back above US$5.91 to provide market bulls with some fresh upside technical momentum. First resistance for March soybeans is seen at US$5.71 3/4 - Friday's high - and then at US$5.78 - the bottom of a downside price gap on the daily bar chart. First support is seen at US$5.63 1/2 - last week's low - and then at US$5.60.

 

Meanwhile, DTN Meteorlogix Weather Service said increasing coverage of shower and thundershower activity during this week in on tap for Brazilian growing areas. In Argentina, a cooler temperature pattern early this week will give way to hotter temperatures later in the week, Meteorlogix added.

 

Informa Economics forecast 2006 U.S. soybean acreage at 76.102 million acres, up 3.96 million from 2005.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net short futures and options positions totaling 5.642 lots in soybeans, 15,256 contracts in soyoil while holding a net long position of 9,881 lots in soymeal as of Jan. 17.

 

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 news, Egypt's Food Industries Holding Co., or FIHC, said Monday it was tendering to buy 10,000 metric tonnes of soybean oil on Feb. 1.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Monday following a rebound in U.S. soybean futures Friday, traders said. The benchmark May 2006 contract rose RMB26 a metric tonne to settle at RMB2,679/tonne, after trading between RMB2,665/tonne and RMB2,690/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally higher Monday, but the market was range-bound as trading volumes remained low ahead of a string of holidays next week, traders said. The benchmark April CPO contract ended up MYR3 at MYR1,439 a metric tonne, with the contract moving in a narrow range of MYR1,436 to MYR1,440/tonne.

 

Rotterdam soybeans were mixed and soymeal prices were higher, and European vegoils were mixed.