February 3, 2006

 

CBOT Soy Outlook on Friday: Steady to up 2 cents; in tune with e-CBOT

 

 

Soybean futures on the Chicago Board of Trade are seen opening steady to firmer, in tune with overnight price movement, as the market continues to stabilize heading into the weekend.

 

Analysts expect soybeans to open steady to 2 cents per bushel higher.

 

In overnight electronic trade, March soybeans were 1/2-cent higher at $5.84 1/2, March soymeal was $1.40 higher at $183.30 and March soyoil was 1 point higher at 21.96 cents per pound.

 

The market is looking for stability, with traders anticipating another choppy session as the market awaits rain and coverage totals from weekend rains in Argentina, analysts said.

 

The market may take its cue from price action in the neighboring wheat and corn markets, reminiscent of Thursday's price strength. Light end-of-the-week profit-taking may be a feature, particularly if commodity funds choose to stay on the sidelines, traders added.

 

Nevertheless, bearish underlying fundamentals are expected to limit upside potential, with abundant supplies, quiet export markets and reports of good rains moving through key growing areas of Argentina applying overhead pressure.

 

Market technicians said sloppy daily chart patterns promote more choppy and volatile trading in the near term.

 

First resistance for March soybeans is seen at $5.85 - Thursday's high - and then at $5.90. First support is seen at $5.77 1/2 Thursday's low - and then at $5.73 1/2.

 

DTN Meteorlogix Weather Service said a cold front currently over the corn and soybean areas of central Argentina will slowly move northward during the next seven days bringing beneficial rainfall to most major soybean areas. Beneficial showers and thunderstorms are forecasted to continue through the weekend, before drier weather returns next week. Temperatures are seen near to below normal for the next five to seven days, Meteorlogix added.

 

In Brazil, above-normal temperatures and below-normal rainfall is forecast for the next two to three days, before giving way to scattered showers and cooler temperatures from south to north next week, Meteorlogix said.

 

Rotterdam soybeans and soymeal prices were higher, and European vegoils were mostly flat.

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives resumed trading Friday after a long break, but the market failed to gather momentum, ending mixed after a choppy trading day. The benchmark April CPO contract ended at MYR1,438 a metric tonne, down MYR5 from Jan. 27. The market was closed Jan. 30 to Feb. 2 for a slew of national holidays.

 

Chinese soybean futures were closed due to the Lunar New Year Holiday.

 

The National Commodities Supply Corp., or Conab, of the Brazilian Agriculture Ministry is to release it's third estimate of the 2005-06 soy harvest Monday, the Agriculture Ministry said Friday.

 

Indian soybean processors have sold 10,000 metric tonnes of soymeal to buyers in Pakistan at around $211 a tonne, to be delivered at the land border in the northern state of Punjab, a senior industry official said Friday.