February 21, 2006

  

CBOT Soy Outlook on Tuesday: Down 5-7 cents on weak e-CBOT, technicals

  

 

Soybean futures at the Chicago Board of Trade were called to open down 5-7 cents on Tuesday following weak overnight trade and on a technical setback from Friday's rally to a 6-week high, brokers said.

 

CBOT agricultural futures were closed Monday in observance of President's Day.

 

"It has been difficult to keep CBOT March above the US$6 per bushel level," said John Kleist of Kleist Ag Consulting. "The market again backed off US$6 (overnight) and the lack of direction is reflected in the commitment of traders data: funds are about net even in (CBOT) beans and meal and net short in oil."

 

In overnight screen trade, the e-cbot March soybean contract settled down 7 cents at US$6.07 1/2 a bushel. March soymeal ended down US$2.60 a short tonne at US$184.60, and March soyoil closed down 0.22 cent at 23.49 cents a pound.

 

It will take a close in CBOT May soybeans below last week's low of US$5.83 to provide the bears with fresh downside technical momentum, a technical trader said. First resistance for May soybeans was seen at US$6.17--Friday's high--and then at US$6.22 1/4--the October 2005 high. First support was seen at US$6.08--Friday's low--and then at US$6.05-the bottom of Friday's upside price gap on the daily bar chart.

 

The CFTC reported Friday that speculators in CBOT soybean futures for the week ended February 14 decreased short holdings by 4,791 lots to hold 60,672 short positions and increased their long holdings by 230 lots to hold 58,908 long positions.

 

For CBOT soybean futures and options combined, speculators were short 58,233 lots, down 6,473 contracts from the week before, and long 59,194 contracts, up 16 lots from the previous week.

 

For CBOT soymeal futures only, speculators for the week ended Feb. 14 boosted long positions and cut short holdings to become net long. They increased their long holdings by 1,263 lots to hold 22,081 long positions and cut their short holdings by 953 lots to hold 21,046 short positions.

 

For CBOT soymeal futures and options combined, speculators were long 23,141 lots, up 2,054 contracts, and short 20,825 contracts, down 781 lots from the previous week.

 

For CBOT soyoil futures only, speculators for the week ended Feb. 14 decreased their net short position, cutting short holdings by 905 lots to 30,901 lots and decreasing long holdings by 577 lots to 27,591 lots.

 

For CBOT soyoil futures and options combined, speculators also cut their net short position, decreasing short holdings by 998 lots to 30,678 contracts and decreasing long holdings by 704 lots to 22,951 lots.

 

U.S. Midwest cash soybean basis bids were mostly steady to weak early Tuesday, cash dealers said. Spot cash soybean bids were down 6 1/2 cents in Peoria, flat in Sioux City, Iowa, and flat in Chicago, they noted.

 

In Brazil, forecasts called for scattered showers and little stressful heat, according to Meteorlogix weather service.

 

Brazilian agriculture market consulting firm AgRural said on Monday that Brazil's 2005-06 soy harvest should total 56.2 million metric tonnes, 2.3% less than its January estimate and 3.2% less than their first crop estimate in August. Regional dry weather problems in soy producing states like Parana, Mato Grosso do Sul and Bahia were the principal reason for the reduction, an analyst said.

 

In Argentina, forecasts called for thunderstorms beginning Wednesday after hot, dry conditions early this week, Meteorlogix weather service said early Tuesday.

 

At the Dalian Commodity Exchange, soybean futures settled mostly lower Tuesday after thin trade amid ongoing bird flu concerns and a lingering lull in demand after Chinese New Year.

 

The benchmark September 2006 soybean contract fell RMB14 to settle at RMB2,766 a metric tonne; the benchmark September 2006 soymeal contract settled RMB20 lower at RMB2,400/tonne; and the benchmark September 2006 soyoil contract fell RMB22 to settle at RMB5,145/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended lower Tuesday as traders took profits from a recent rally amid cautious sentiment ahead of a key price outlook conference.

 

The benchmark May CPO contract ended at MYR1,474 a metric tonne, down MYR12 from Monday. The annual price outlook conference, the industry's main event for the year, starts late Wednesday.

 

In Rotterdam, spot soybean and soymeal prices were steady to weak Tuesday, cash sources said.