January 26, 2007

 

CBOT Soy Outlook on Friday: Mixed start on quiet overnight

 

 

Chicago Board of Trade soybean futures are called to start Friday's day session mixed after moving only slightly higher overnight and with an absence of fresh news to steer prices, sources said.

 

In e-cbot trade, CBOT March soybeans were up 3/4 cent at US$7.14 a bushel.

 

The story line for soybeans remains mostly the same without any fresh inputs out overnight, a CBOT floor source noted. Weather in South America continues to look good, despite some concerns about excessive wetness, he said.

 

In Argentina, showers and cooler weather in the short range should favor developing crops, the DTN Meteorlogix weather firm reported. Long-range charts are more uncertain as hot weather may return to the growing areas, the firm noted.

 

Argentina's Agriculture Secretariat forecasts a record 43 million tonnes of soybeans will come from its 2006-07 crop, while the U.S. Department of Agriculture estimates Argentina will produce 42.5 million tonnes.

 

In Brazil, soil moisture, showers and temperatures remain mostly favorable to crops, according to the weather firm. However, the chance for increasing soybean rust is still there because of wetness, Meteorlogix added.

 

For price direction, soybean futures will likely continue to look to the neighboring corn market, a technical analyst said. Bulls are still in firm technical control, he said.

 

Overnight, CBOT March corn ended flat, and outside markets are mixed, soureces noted.

 

The next upside price objective for the soybean bulls is to close prices above solid chart resistance at the contract high of US$7.28 1/2, the technical analyst said. The next downside price objective for the bears is closing prices below solid support at US$7.00.

 

First resistance for January soybeans is seen at US$7.20 and then at US$7.25. First support is seen at Thursday's low of US$7.08 and then at US$7.06.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Friday, tracking losses in CBOT soybean futures and amid expectations for the coming harvest season in South America, sources said.

 

At the same time, soybean prices in China's major soybean producing regions rose slightly in the week to Friday, shrugging off recent losses in futures because farmers have been reluctant to release stocks, analysts added.

 

Crude palm oil futures on the Bursa Malaysia Derivatives, meanwhile, ended mixed Friday after a choppy, range-bound day as a dearth of fundamental leads sapped trading interest.

 

In other news, the Commodity Futures Trading Commission is slated Friday afternoon to release the weekly commitment of traders report for the period ending Jan. 23.