June 7, 2006

 

CBOT Soy Outlook on Wednesday: Up 1-2 cents; stabilizing price correction

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's open auction session modestly higher, following the e-CBOT theme as the market attempts to stabilize following its correction from Friday's gains.

 

Soybeans are called to open 1 to 2 cents higher.

 

In overnight electronic trade, July soybeans were 2 1/2-cent higher at US$5.96, July soymeal was US$0.80 higher at US$181.70 and July soyoil was 2 points higher at 25.05 cents per pound.

 

The market is poised to start firmer in a rebound from a two-day slide in prices, but with outside market indicators pointing lower, upside momentum maybe limited, said a CBOT commission house broker.

 

Positioning ahead of Friday's supply and demand report is seen as a key objective, but weather will remain a featured driver in the market, with technical factors a main influence in the market near term price trend, traders add.

 

Technical analysts say July soybeans closed near the session low again Tuesday as bullish momentum is fading fast, after big gains last Friday. The next upside price objective for prices is above this week's high of US$6.11. A close back below technical support at US$5.88 would provide fresh downside technical momentum.

 

First resistance for July soybeans is seen at US$6.00 and then at US$6.03 1/4 - Tuesday's high. First support is seen at US$5.93 - Tuesday's low - and then at US$5.88.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest Wednesday. A chance for scattered light showers is possible Thursday and Friday. These may tend to favor northern and eastern areas of the region. Temperatures will average above normal Wednesday with highs in the 80s and low 90s Fahrenheit, near to above normal during Thursday and Friday.

 

In the eastern Midwest, light showers are on tap in eastern areas of the region, with fair conditions in western areas Wednesday. Dry or with only a few light showers are seen for Thursday, with a chance for scattered showers Friday. Temperatures will average near to below normal, with warmer temperatures expected in southwestern areas of the region, Meteorlogix said.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Wednesday, cash dealers said. Spot cash soybean bids were up 4 1/2-cent in Peoria, Ill., and up 1-cent in St. Louis, Mo., according to cash sources Wednesday.

 

Rotterdam soybeans and soymeal prices were lower. European vegoils were flat to higher.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Wednesday, after soybean futures foundered on the Chicago Board of Trade Tuesday. The benchmark September 2006 soybean contract fell RMB10 to settle at RMB2,649 a metric tonne, after trading between RMB2,641/tonne and RMB2,658/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Wednesday after yet another sluggish, range-bound session. The benchmark August CPO contract ended at MYR1,451 a metric tonne, up MYR3 from Tuesday, after moving within a narrow MYR8 range.