April 26, 2006

 

CBOT Soy Outlook on Wednesday: Beans flat-2 cents lower on overnight trade

 

 

Analysts expect Chicago Board of Trade soybean futures to open steady to 2 cents a bushel lower Wednesday on a weak overnight session and a lack of bullish news to support the market.

 

In e-cbot trade, July soybeans fell 2 cents to US$5.91 1/4, July soymeal was down 80 cents at US$173.60 a short tonne and July soyoil was down 14 points to 25.12 cents a pound.

 

"In beans, we may take a little premium off of what we put on yesterday (Tuesday)," said Jason Roose, analyst at U.S. Commodities in West Des Moines, Iowa.

 

The cash soybean market remains fairly strong, "and that's what's giving the market good support," he added.

 

Higher soy complex futures in China may limit potential CBOT losses, sources said.

 

Soybean futures on China's Dalian Commodity Exchange rose Wednesday following overnight gains in CBOT soybean and soyoil futures. Soybean demand remains muted, underscored by lower physical soybean and meal prices in China's local markets.

 

The September contract for No. 1 soybeans rose RMB11 to RMB2,604 a metric tonne. Soymeal and soyoil futures also closed higher.

 

Asian imports of soybeans may slow as China is expected to purchase less, traders said. Large purchases in recent weeks have flooded the Chinese market with soybeans. Overall imports, however, are expected to reach 3 million tonnes in April, which would be a high for 2006, analysts said.

 

Meanwhile, the DTN Meteorlogix weather firm said rains in the U.S. Delta will help improve soil moisture for early development while slowing soybean plantings. Rains in the eastern Midwest will also delay fieldwork for spring planting. In the northern Plains and western Midwest, the forecast calls for mainly dry conditions Wednesday and most of Thursday. There is a chance for showers and some rain through eastern areas during Thursday night or Friday.

 

Rains continue to disrupt harvest in Rio Grande do Sul. On Tuesday, Safras & Mercado, the Brazilian consulting firm, said they expect a drop in production there due to rains limiting harvest in Minas Gerias and Bahia.

 

Biodiesel production capacity within the European Union will reach 6.07 million metric tonnes in 2006, a 44% increase from the previous year, according to figures released Wednesday by the European Biodiesel Board.

 

In other news, the CBOT announced Wednesday it will begin on Aug. 1 the simultaneous electronic and open outcry trading of its agricultural contracts, otherwise known as "side-by-side" trading. Hours for the electronically traded contracts will be from 6:30 p.m. to 6 a.m. CDT, and daytime hours will be from 9:30 a.m. to 1:15 p.m. CDT.

 

Soyoil is expected to find modest pressure from lower palm oil futures.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended lower Wednesday amid talk of strong April production and concerns that the market's recent rise may have been overdone.

 

The benchmark July CPO contract ended at MYR1,473 a metric tonne, down MYR9 from Tuesday after moving between MYR1,471 and MYR1,489/tonne.