February 22, 2006

  

CBOT Soy Outlook on Wednesday: Flat-down 2 cents on South America rain outlooks

 

 

Soybean futures at the Chicago Board of Trade were called to open steady to down 2 cents per bushel Wednesday on forecasts for rain in South American soy growing areas during the next 72 hours and on lingering concerns about the deadly bird flu virus spreading in Europe, brokers said.

 

Poultry purchases fell in France this week after the first case of the deadly bird flu strain H5N1 was detected in a wild duck, while Indian health officials said it was possible humans in India had contracted the deadly virus.

 

Ideas that Tuesday's CBOT soybean losses may have been overdone could stem losses Wednesday, while traders were expecting key analyst Informa Economics to release Wednesday a Brazilian soybean crop estimate, they noted.

 

Agriculture market consulting firm AgRural said on Monday that Brazil's 2005-06 soy harvest should come in at 56.2 million metric tonnes, down 2.4% from their January estimate and nearly 2 million tonnes less than official estimates of a 58.1 million tonne 2005-06 harvest made by the National Commodities Supply Corp. of the Brazilian Agriculture Ministry in January.

 

"The last estimate by the Brazilian government showed there hasn't been a lot of damage, so we're looking for a pretty respectable number," said Don Roose, of U.S. Commodities.

 

In overnight screen trade, the e-cbot May soybean contract settled flat at US$6.01 a bushel. May soymeal ended down 30 cents a short tonne at US$181.90, and May soyoil closed down 0.11 cent at 23.38 cents a pound.

 

A close in CBOT May soybeans above last Friday's high of US$6.17 would provide the bulls with fresh upside technical momentum, a trader said. A close below last week's low of US$5.83 would provide the bears with some fresh downside technical momentum.

 

First resistance for CBOT May soybeans was seen at US$6.05 and then at US$6.11--Tuesday's high. First support was seen at US$5.95--Tuesday's low--and then at US$5.90.

 

Ahead of the Feb. 28 first notice day for CBOT March soy deliveries, there were 1,903 soybean contracts registered with the exchange as of Tuesday, unchanged from the previous day. There were 5,379 soyoil registrations and 34 soymeal registrations, both unchanged from the previous day.

 

U.S. Midwest cash soybean basis bids were mixed Wednesday, cash dealers said. Spot cash soybean bids were up 1 cent in St. Louis, flat in Sioux City, Iowa, and Decatur, Indiana, and up 6 cents in Cincinnati, they noted.

 

At the Dalian Commodity Exchange, soybean futures settled mostly lower following losses at the CBOT, brokers said.

 

The benchmark September 2006 soybean contract fell RMB25 to settle at RMB2,741 a metric tonne. The benchmark September 2006 soymeal contract settled RMB29 lower at RMB2,371/tonne; and the benchmark September 2006 soyoil contract fell RMB13 to settle at RMB5,132/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower ahead of a key meeting, brokers said.

 

The benchmark May CPO contract ended at MYR1,471 a metric tonne, down MYR3 from Tuesday. The Bursa Malaysia's annual palm oil price outlook conference, the industry's most important event of the year, begins late Wednesday.

 

In Rotterdam, spot soybean and soymeal prices were lower Wednesday, cash sources said.