March 17, 2006

 

CBOT Soy Outlook on Friday: Beans up 1-3 cents on overnight, tech bounce

 

 

Soybean futures on the Chicago Board of Trade are expected to open 1-3 cents a bushel higher Friday on a firmer overnight trade and as prices post a minor technical bounce from lower prices, sources said.

 

On the e-CBOT platform overnight, most-active May soybeans rose 2 cents to $5.78 1/4 and July beans were up 2 cents to $5.90 1/4. May soymeal was 40 cents higher at $173.50 a short tonne and May soyoil was up 2 points to 23.45 cents a pound.

 

May soybeans closed at two-month lows Thursday on weak technicals and stops that spurred speculative fund sales. Weekly export sales were considered neutral for the market. Friday's open is expected to see prices bounce modestly from lower levels.

 

"I think we've taken enough risk premium out of the market short-term, and we're looking for a little bit of a dead-cat bounce. We tried to press it lower overnight and we did bounce, so we're looking for soybeans 1 to 3 cents higher," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Wintry weather is expected to enter the Midwest this weekend, with light snow developing Sunday in southwestern areas and periods of snow on Monday and Tuesday, DTN Meteorlogix said. Locally heavier amounts could be seen in Nebraska and parts of Iowa, with 5-10 inches of snow possible Sunday and into Monday.

 

Recent precipitation is recharging soil moisture levels throughout much of the Midwest.

 

Soybean basis levels were mostly steady Thursday, "which tell us we've reached a sold-out area in the cash market," Roose said.

 

Meanwhile, soybean prices in Rotterdam were mostly higher Friday afternoon.

 

Soybean futures on China's Dalian Commodity Exchange fell on lower CBOT prices. The benchmark September contract settled RMB17 lower at RMB2,655 a tonne, after falling to a RMB2,648/tonne three-month low early in the session.

 

Soybean prices in China's major growing regions continued to fall this week, as farmers sell part of their stocks ahead of the spring planting season. Crushers obliged the producers by buying up the soybeans, as crushing profits have been slim with soymeal prices falling along with shrinking demand for animal feed.

 

SOY PRODUCTS

 

Soy product markets are expected to open steady to firmer following the overnight trend and the firmer calls for soybeans.

 

Crude palm oil futures on the Bursa Malaysia Derivatives exchange closed mostly steady in cautious trade ahead of the release of key export data and with traders unwilling to take positions ahead of the weekend. The benchmark June contract settled at MYR1,455 a tonne, down MYR1 from Thursday.

 

Cargo surveyors SGS (Malaysia)Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled to issue Malaysian palm oil export projections on Monday for the first 20 days of March. The trade is expecting 700,000-730,000 tonnes, down from 740,000-760,000 tonnes in the Feb. 1-20 period.

 

In Rotterdam, spot soybean and soymeal prices were mostly steady to weaker.