June 5, 2006

 

CBOT Soy Outlook on Monday: Seen down 1-2 cents; following e-CBOT theme

 

 

Soybean futures at the Chicago Board of Trade are poised to start Monday's session lower, in tune with overnight action, but traders anticipate mixed activity if outside market influences stay higher.

 

Soybeans are called to open 1 to 2 cents lower.

 

In overnight electronic trade, July soybeans were 2 cents lower at US$6.07, July soymeal was US$0.40 lower at US$185.00 and July soyoil was 3 points higher at 25.46 cents per pound.

 

The overnight session will provide initial direction for prices, but traders will keep a close eye on outside inflationary markets to see if their advances gain momentum leading to upside movement, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Talk of Friday's strong gains being a bit overdone is seen adding mild pressure to prices, with outlooks for the U.S. Department of Agriculture to show strong soybean crop ratings and favorable near term weather taking some edge off prices.

 

However, market technicals turned positive Friday, and with good buying seen beneath the market downside pressure maybe limited, Roose added.

 

Technical analysts say the market has some fresh technical momentum heading into the new trading week, and it appears that a near-term low is in place. The next key upside price objective for the July future is technical resistance at the May high of US$6.20.

 

First resistance for July soybeans is seen at US$6.10--Friday's high--and then at US$6.15. First support is seen at US$6.06 and then at US$6.00.

 

The DTN Meteorlogix Weather Service forecast said scattered to widely scattered thundershowers are on tap for Monday or during Tuesday in the western Midwest. Mainly dry conditions are expected Wednesday. Temperatures will average near to above normal with highs mostly in the 80s during this period.

 

In the eastern Midwest, mainly dry conditions are in store for Monday, with a chance for scattered to widely scattered thundershowers Tuesday into Wednesday. Temperatures will average above normal today and Tuesday, near normal Wednesday, Meteorlogix said.

 

On tap for Monday, U.S. Department of Agriculture is scheduled to release its weekly export inspections report 10:00 a.m. CDT and its weekly crop progress report at 3:00 p.m. CDT. Traders anticipate soybean crop ratings in the area of 65% to 70% good to excellent.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Monday, cash dealers said. Spot cash soybean bids were down 4-cent in Peoria Ill, and down 1-cent in St Louis, MO, according to cash sources Monday.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled sharply up Monday, tracking strong gains in Chicago Board of Trade soybean futures Friday. The benchmark September 2006 soybean contract settled RMB47 higher at RMB2,668 a metric tonne, after trading between RMB2,660/tonne and RMB2,688/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Monday, boosted by the strength of other commodity markets including soyoil and crude oil futures. The benchmark August CPO contract ended at MYR1,447 a metric tonne, up MYR9 from Friday.