March 21, 2006

 

CBOT Soy Outlook on Tuesday: Flat-up 2 cents on technical bounce

 

 

Soybean futures at the Chicago Board of Trade were called to open flat to up 2 cents per bushel Tuesday on a technical bounce after Monday's break to a 3-1/2 month low in bellwether May soybeans, brokers said.

 

Gains should be limited by ample U.S. soy supplies and the building harvest of a hefty South American soybean crop, brokers said. Moreover, recent rains in the U.S. Midwest have recharged many fields, offering better planting prospects, brokers said.

 

In overnight screen trade, the e-CBOT May soybean contract settled up 3/4 cent at $5.73 1/4 a bushel. May soymeal ended up 30 cents a short tonne at $173.60, and May soyoil closed down 0.11 cent at 22.80 cents a pound.

 

Prices of CBOT May soybeans on Monday closed near the session low, hit a fresh 3.5-month low and scored a bearish "outside day" down on the daily bar chart, a technical trader noted. Bears are in technical control and gained more power Monday, he added. Their next downside price objective is a challenge of support at the January low of $5.72 1/2 or below.

 

It will take a close in CBOT May soybeans above resistance at $5.95 to provide the bulls with fresh upside technical momentum. First resistance for May soybeans is seen at $5.78 and then at $5.82 - Monday's high. First support is seen at $5.71 1/4 - Monday's low - and then at $5.70. U.S. Midwest cash soybean basis bids were steady to firm Tuesday, cash dealers said.

 

Spot cash soybean bids were flat in St. Louis Tuesday, up 3 cents in Sioux City, Iowa, and up 2 cents in Cincinnati, they noted.

 

At China's Dalian Commodity Exchange, soybean futures closed slightly lower. The benchmark September 2006 soybean contract fell RMB6 to settle at RMB2,668 a metric tonne.

 

The September 2006 soymeal contract settled RMB10 lower at RMB2,266/tonne, while the September 2006 soyoil contract fell RMB21 to settle at RMB5,157/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended lower Tuesday as concerns about slow demand kept the market under pressure, sources said.

 

The benchmark June CPO contract ended at MYR1,441 a metric tonne, down MYR8 from Monday, after moving within a narrow range of MYR1,440-MYR1,448/tonne.

 

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