March 29, 2006

 

CBOT Soy Outlook on Wednesday: Steady awaiting Friday's USDA data

 

 

Soybean futures at the Chicago Board of Trade were called to open mostly steady Wednesday following lackluster overnight trade, with light positioning expected ahead of Friday's U.S. Department of Agriculture 2006 prospective U.S. spring plantings and quarterly stocks data, brokers said.

 

"The overnight (e-cbot) trade was quiet and China's soybeans were unchanged," said Don Roose, of U.S. Commodities. "We're kind of handcuffed here waiting for the report.

 

"I think the trade feels fundamentally that we've got a bearish slant to the market but the market still seems to be holding at technical support," he added. "With that in mind, I think the market has a bias on rallies to see some hedge selling out of South America with the real under pressure. It gives them the incentive to move soybeans."

 

Brazilian cash sources noted a pickup in Brazilian farmer sales of soybeans this week as the Brazilian real fell following the resignation Monday of Finance Minister Antonio Palocci.

 

Private and public estimates for the Brazilian soybean crop have been falling over the last month, and currently hover between 55.3 million and 57.2 million metric tonnes, down from a high of 58.1 million tonnes predicted in January.

 

"With our farmers here in the U.S., there has been a pretty good movement over the winter," Roose added. "It seems like producer sales are slow, so you're really reliant on South America."

 

The USDA is scheduled to report Friday at 7:30 CST its plantings and quarterly stocks data as of March 1.

 

U.S. analysts, on average, expected the USDA to report Friday that U.S. farmers would seed 74.050 million acres to soybeans, up from last year's 72.142 million.

 

March 1 U.S. soybean stocks were expected to be reported at a record 1.678 billion bushels, above last year's 1.381 billion. Estimates ranged from 1.660 billion to 1.703 billion bushels.

 

Still, analysts have noted a tendency for the USDA's March 31 quarterly stockestimates to come in below the trade's expectations, and they noted Dow Jones' average analyst plantings estimate was at the high end of pre-report estimates.

 

In overnight screen trade, the e-cbot May soybean contract settled down 1/2 cent at $5.81 a bushel. May soymeal ended up 50 cents a short tonne at $178.90, and May soyoil closed up 0.06 cent at 22.97 cents a pound.

 

Bears are still in near-term technical control in CBOT May soybeans and their next downside price objective is to close prices below technical support at this month's low of $5.71 1/4, a technical source said. It will take a close above chart resistance at $5.95 to provide the bulls with fresh upside technical momentum, he added.

 

First resistance for CBOT May soybeans was seen at $5.83 1/2--Tuesday's high--and then at $5.87 1/2-this week's high. First support was seen at $5.76 1/2--this week's low--and then at $5.71 1/4--the March low.

 

U.S. Midwest cash soybean basis bids were mixed Wednesday, cash dealers said.

 

Spot cash soybean bids were up 9 cents in Champaign, Ill., down 2 cents in Omaha/Council Bluffs, Iowa, and down 2 cents in Mankato, Minn., they noted.

 

At China's Dalian Commodity Exchange, the benchmark September 2006 soybean contract settled unchanged at RMB2,693 a metric tonne, after trading between RMB2,686 and RMB2,698/tonne.

 

The benchmark DCE September 2006 soyoil contract edged down RMB1 to settle at RMB5,157/tonne, after trading between RMB5,150 and RMB5,166/tonne. The DCE September 2006 soymeal contract fell RMB2 to settle at RMB2,298/tonne, after trading between RMB2,292 and RMB2,305/tonne.

 

In Malaysia, crude palm oil futures on the Bursa Malaysia Derivatives ended slightly lower. The benchmark June CPO contract ended at MYR1,442 a metric tonne, down MYR6 from Tuesday after moving between MYR1,440 and MYR1,452.

 

In Rotterdam, spot soybeans were firm and soymeal prices were steady Wednesday, cash sources said.