March 8, 2006

 

CBOT Soy Outlook: Flat-down 1 cent on US rain, South American harvest

 

 

Soybean futures at the Chicago Board of Trade were called to open steady to down 1 cent per bushel Wednesday on improved U.S. Midwest soil conditions ahead of the key planting season, the building South American soy harvest and increased sales due to the recent weakening of Brazil's real, a technical pressure, brokers said.

 

Lingering worries about a possible slowdown in soymeal demand due to the spread of a deadly strain of avian flu were also expected to weigh on CBOT soy futures. A 10th human death due to the disease was reported in China, brokers noted.

 

In overnight screen trade, the e-cbot May soybean contract settled down 1/4 cent at US$5.89 3/4 a bushel. May soymeal ended down 30 cents a short tonne at US$174.00, and May soyoil closed down 0.19 cent at 24.12 cents a pound.

 

Prices for CBOT May soybeans are now near the bottom of a choppy trading range on the daily bar chart, said a technical trader. It will take a close above resistance at the February high of US$6.17 to provide the bulls with fresh upside technical power and push prices out of the recent choppy trading range. A close below the February low of US$5.81 would produce a bearish downside breakout from the aforementioned trading range and suggest more price weakness to come.

 

"Beans are at an important area technically, and you could see some more selling come into the market if those areas are violated," agreed Don Roose, of U.S. Commodities. "We're in this area of 'do we' or 'don't we.'"

 

First resistance for May soybeans was seen at US$5.95 and then at US$6.00, the first technical trader said. First support was seen at US$5.89 - Tuesday's low - and then at US$5.85.

 

There were 863 deliveries posted Wednesday against CBOT March soybeans, with a customer of Dowd Wescott stopping 651 lots, brokers noted.

 

Soybean contracts registered with the CBOT for delivery purposes as of Tuesday afternoon rose 138 lots to 3,838 lots.

 

There were 386 deliveries posted Wednesday against CBOT March soyoil, with a customer of Dowd Wescott stopping 175 lots. No soymeal deliveries were posted.

 

There were 6,413 soyoil registrations, up 70 lots from Monday's tally, and 34 soymeal registrations, unchanged from Monday's total.

 

U.S. Midwest cash soybean basis bids were steady to firm Wednesday, cash dealers said. Spot cash soybean bids were up 4 cents in Evansville, Ind., St. Louis, Kansas City and Cincinnati, Ohio, and flat in Des Moines, Cedar Rapids and Sioux City, they noted.

 

At China's Dalian Commodity Exchange, soybean futures settled mostly lower Wednesday, tracking overnight losses in soybean futures on the Chicago Board of Trade, said analysts. The benchmark September 2006 soybean contract settled RMB27 lower at RMB2,704 a metric tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower with the benchmark May CPO contract at MYR1,469 a metric tonne, down MYR3 from Tuesday.

 

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