January 24, 2006

 

CBOT Soy Outlook on Tuesday: Down 1-3 cents in subdued world trade

  

 

A weaker start for soy complex futures are expected Tuesday at the Chicago Board of Trade as trade begins to slow in Asia ahead of next week's holidays and long-range weather forecasts for beneficial crop weather in Argentina weight lightly.

 

Most-active March soybeans are called to open 1-3 cents weaker.

 

With little fresh news around to give a definitive direction soybeans could see a choppy session, said Don Roose, president, U.S. Commodities. Technical signals are turning positive, but without fundamentals to underpin the strength, soybeans not likely to see much of a rally.

 

Next week is the Lunar New Year holiday in Asia and markets there are already entering a holiday mode, Roose said. "Volume on e-cbot was quiet and with China's spring festival, world trade is becoming subdued," he said, which might affect markets in the U.S.

 

In overnight e-cbot trade March soybeans fell 1 1/4 cents to US$5.73 1/4 a bushel. March soymeal rose 20 cents to US$180.70 a metric tonne and March soyoil slipped 4 points to 21.48 cents a pound.

 

DTN Meteorlogix notes in Argentina's soy-growing regions only light showers fell in southern Cordoba, La Pampa and southwest Buenos Aires. Tuesday there is a chance for a few light showers. Temperatures are forecast to average above normal Tuesday, near to below normal Wednesday, near to above normal Thursday. The weekend is seen dry, although Sunday could see a few light showers, with temperatures above normal.

 

"After next week the forecasts call for some (showers) and a bit cooler, although that's a little far ahead," Roose said.

 

Brazil's soybean-growing regions saw some scattered showers and thunderstorms of 0.25 to 1 inch through Rio Grande do Sul and Parana, while Mato Grosso do Sul and Mato Grosso were dry. Temperatures were generally above normal in northern areas and near to below in southern areas.

 

DTN Meteorlogix said scattered rains of 0.30-1.50 inches continue in Rio Grande do Sul and Parana Tuesday through Thursday. Rains leave Rio Grande do Sul by the weekend, but Parana could still see showers Saturday.

 

In Mato Grosso do Sul and Mato Grosso, generally dry conditions are seen, Tuesday and Wednesday, with scattered showers Thursday through the weekend.

 

In export business, Taiwan bought 57,000 metric tonnes of U.S. soybeans Tuesday, for a February-March arrival, Dow Jones Newswires reported. Specific dates and port of arrival weren't disclosed.

 

India is unlikely to raise edible oil imports due to a bigger harvest of winter-sown oilseeds, but factors such as international prices, the amount of government stocks released and a favorable import duty for soyoil may have some bearing on imports, industry officials told Dow Jones Newswire. Imports may hold near last year's level of 5 million metric tonnes.

 

India's National Agricultural Cooperative Marketing Federation plans to buy 3 million metric tonnes of rapeseed from local farmers in 2006 to stabilize intervention prices, it said Monday. The government is already warehousing about 1.8 million tonnes of rapeseed from the previous harvest.

 

Soybean futures on China's Dalian Commodity Exchange were mixed in pre-holiday trading. May gained RMB4 to RMB2,683 a metric tonne. The market is closed next week for the Lunar New Year holiday.

 

Crude palm oil futures were weaker on the Bursa Malaysia Derivatives, trapped in a narrow range, traders said, ahead of next week's holidays. April fell MYR6 to MYR1,433 a metric tonne.