February 2, 2006

 

CBOT Soy Outlook on Thursday: Steady down 1 cent; following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen opening Thursday's session with a steady to weak undertone, following the overnight theme, as the market attempts to find stability after recent volatile action.

 

Analysts expect soybeans to open steady to 1 cent per bushel lower.

 

In overnight electronic trade, March soybeans were unchanged at $5.79 1/2, March soymeal was $0.30 higher at $181.50 and March soyoil was 2 points lower at 21.80 cents per pound.

 

Favorable near term weather outlooks for Argentina remain a bearish feature, but with longer range weather models looking drier, downside movement may be limited, analysts said.

 

A quiet news front is not providing any fundamental incentives to push the market in either direction, with traders awaiting fresh inputs to direct prices. Outside markets are mixed with metals up and energies lower are seen adding to the stagnant tonnee, with as expected weekly export sales failing to spark enthusiasm, traders add.

 

Nevertheless, analysts say Thursday's close at session lows should provide mild pressure, and without some fresh speculative buying futures may continue to catch up with its bearish underlying fundamental characteristics.

 

Technical analysts said the daily chart for March futures are sloppy at present, with market bulls losing their technical steam. A close below $5.75 is seen opening the door to another leg down in prices.

 

First resistance for March soybeans is seen at $5.85 and then at $5.90. First support is seen at $5.73 1/2 and then at $5.70.

 

The U.S. Department of Agriculture's 2005-06 marketing year soybean weekly export sales were 446,600 metric tonnes, 14% below the previous week and 34% under the prior four-week average. Major buyers include Taiwan, in for 135,500 tonnes, and Mexico, buying 95,700 tonnes.

 

Trader expectations ranged from 400,000 to 600,000 tonnes.

 

Soymeal sales totaled 198,200 tonnes, 5% above the week earlier and 71% higher than the prior four-week average. Major increases came from unknown destinations, which bought 64,000 tonnes and Mexico, buying 51,000 tonnes. Trader estimates ranged from 75,000 to 150,000 tonnes.

 

Soyoil sales of 20,800 tonnes were mainly for South Korea, which bought 14,000 tonnes. Sales estimates ranged from zero to 10,000 tonnes.

 

DTN Meteorlogix Weather Service said scattered showers and thundershowers are on tap for Argentina during Friday into Saturday. The showers may linger into Sunday, but the long range outlook for the 6-10 day period appears drier and warmer than it looked yesterday, Meteorlogix reports.

 

Meanwhile, hot and mostly dry weather is expected for another 3-4 days in Brazil, before showers and cooler weather arrives early next week, Meteorlogix said.

 

The Census Bureau revised its December soyoil stocks figure to 2.236 billion pounds, up from 2.189 billion reported Jan. 26, and up from November's stock figure of 1.885 billion pounds.

 

Rotterdam soybeans and soymeal prices were lower, and European vegoils were lower. In overseas markets, Chinese soybean futures and Malaysian palm oil futures were closed due to the Lunar New Year Holiday.