February 23, 2006

  

CBOT Soy Outlook on Thursday: Mixed; Argentine rains vs firm e-CBOT

 

 

Soybean futures at the Chicago Board of Trade were called to open mixed Thursday as rains in Argentina's soy belt, a bearish factor for CBOT soy prices, could be tempered by mostly firm overnight trade after recent losses, brokers said.

 

"The bean market is in a unique position," said John Kleist, of Kleist Ag Consulting. "It's been a laggard. Now it gets dicey. Are there any nuances in the (South American) weather? Any change in (South American) production, and traders will be watching it."

 

In overnight screen trade, the e-cbot May soybean contract settled up 1/2 cent at US$5.87 a bushel. May soymeal ended up 20 cents a short tonne at US$177.90, and May soyoil closed up 0.01 cent at 23.15 cents a pound.

 

Kleist and other traders said Thursday's U.S. Census Bureau January crush data were neutral for prices.

 

Census reported Thursday that the U.S. January soybean crush totaled 151.492 million bushels, just below the average analyst estimate of 152 million.

 

U.S. January soyoil stocks totaled 2.477 billion pounds, just below the average analyst estimate of 2.484, but still large enough to pressure prices, traders said. Soymeal stocks totaled 324,402 tonnes, below estimates of 341,700 tonnes.

 

U.S. Midwest cash soybean basis bids were steady to firm Thursday, cash dealers said. Spot cash soybean bids were up 6 cents in St. Louis, flat in Sioux City, Iowa, and Chicago, and down 1 cent in Cincinnati, Ohio, they noted.

 

In export news, South Korean soybean crusher CJ Corp. has rejected offers in a tender concluded late Wednesday for 55,000 metric tonnes of optional origin soybeans because they were too high, a CJ official said Thursday.

 

Taiwan Sugar Corp. bought two combined cargoes totaling 53,000 metric tonnes of U.S. No. 2 yellow corn and U.S. No. 2 yellow soybeans in two separate tenders concluded late Wednesday, a Taipei-based trader said Thursday.

 

Mostly dry conditions Thursday in Brazil's soy belt should be followed by scattered rains from Friday through Sunday, Meteorlogix weather service said.

 

In Argentina, rains of 0.25 to 1.00 inch fell during the last 24 hours, while rains of 0.25 to 0.75 inch were expected Thursday. Mostly dry and cooler conditions were forecast Friday.

 

At the Dalian Commodity Exchange, soybean futures settled lower following losses in CBOT soy futures and other commodities, including metals, brokers said.

 

The benchmark September 2006 soybean contract settled RMB27 lower at RMB2,714 a metric tonne; the benchmark September 2006 soymeal contract ended RMB31 lower at RMB2,340/tonne; and the benchmark September 2006 soyoil contract fell RMB18 to end at RMB5,114/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended lower on late sales after the market failed to make gains despite various price and production forecasts earlier in the day.

 

The benchmark May CPO contract ended at MYR1,467 a metric tonne, down MYR4 from Wednesday.

 

In Rotterdam, spot soybean and soymeal prices were weak Thursday, cash sources said.

 

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 technical trader said. A close below last week's low of US$5.83 would provide the bears with some fresh downside technical momentum.

 

CBOT soybean trading Thursday could be extra important, as good follow-through selling pressure would give the bears fresh downside technical momentum, he noted. First resistance for May soybeans was seen at US$5.90 and then at US$5.95. First support was seen at US$5.85 - Wednesday's low - and then at US$5.83.