June 1, 2006

 

CBOT Soy Outlook on Thursday: Lower on e-CBOT, outside market indicators

 

 

Chicago Board of Trade soybean futures are expected to start Thursday's session on weak footing, taking its cue from lower overnight prices and weak outside market indicators.

 

Soybeans are called to open 1 to 3 cents lower.

 

In overnight electronic trade, July soybeans were 3/4-cent lower at US$5.78 1/2, July soymeal was US$0.90 lower at US$171.50 and July soyoil was 9 points lower at 25.07 cents per pound.

 

The soybean market continues to suffer from a lack of fresh news circulating in the complex, with favorable early crop conditions and slack demand providing little fundamental opportunities for upside movement, analysts said.

 

The market continues to focus on the movements of outside inflationary markets, with declines in metals and crude oil futures as well as technical momentum promoting a lower start, traders add.

 

Technical analysts say July's price action Wednesday could be seen as a bearish downside "breakout" from a pennant pattern on the daily bar chart, with downside momentum gaining a near-term technical advantage. The next key downside price objective is technical support at the April low of US$5.68 1/4, while it will take a close back above resistance at US$5.90 to provide some fresh upside technical momentum.

 

First resistance for July soybeans is seen at US$5.83--Wednesday's high--and then at US$5.89--last week's high--and then at US$5.95. First support is seen at US$5.77 1/2- Wednesday's low--and then at US$5.75.

 

The DTN Meteorlogix Weather Service forecast said the western Midwest has a chance for a few more afternoon showers in central Missouri Thursday. Mainly dry conditions will be common across the region Friday and Saturday. Temperatures will average near to above normal Thursday, above normal Friday and Saturday.

 

In the eastern Midwest, scattered thundershowers are on tap for Thursday, before drier conditions emerge Friday and Saturday. Temperatures will average near to below normal Thursday, near to above normal Friday and Saturday, Meteorlogix said.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday, cash dealers said. Spot cash soybean bids were down 2 cents in Bloomington, Ill, according to cash sources Thursday.

 

U. S. Census Bureau revised its April soyoil stocks figure, raising the April stocks figure to 2.760 billion pounds from the 2.751 billion pounds originally reported May 25. The figure is up from March stocks of 2.718 billion pounds and well above the 1.803 billion pounds reported at the same time last year.

 

Meanwhile, Taiwan's Breakfast Soybean Procurement Association, or BSPA, bought 60,000 metric tonnes of Brazil-origin soybeans in a tender concluded Thursday, an association official said.

 

Rotterdam soybeans and soymeal prices were mostly lower. European vegoils were mixed.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled sharply lower Thursday, on overnight losses in Chicago Board of Trade soybean futures, amid the slump of local copper and rubber futures, traders and analysts said. The benchmark September 2006 soybean contract settled RMB46 lower at RMB2,603 a metric tonne, after trading between RMB2,580/tonne and RMB2,641/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower after staying within a narrow range Thursday amid cautious market sentiment. The benchmark August CPO contract ended at MYR1,439 a metric tonne, down MYR5 from Wednesday after moving within a tight MYR8 range.