June 14, 2006

 

CBOT Soy Outlook on Wednesday: Up 1-2 cents; following e-CBOT theme

 

 

Soybean futures on the Chicago Board of Trade is seen starting Wednesday's session on firm footing, following the overnight theme as the market continues its sideways trend.

 

Soybeans are called to open 1 to 2 cents higher.

 

In overnight electronic trade, July soybeans were 1 1/2-cent higher at US$5.97 1/4, July soymeal was US$1.60 higher at US$183.00 and July soyoil was 4 points lower at 24.93 cents per pound.

 

The market remains indecisive, but Tuesday's bounce off underlying technical support, the market's willingness to keep weather premium in prices and a constructive crush figure should support a higher start, said John Kleist of Kleist Agricultural Consulting.

 

Hot weekend weather forecasts with only scattered showers in the western Midwest is enough of a threat to support prices, with a recovery in outside commodity markets aiding the firm tone, traders add.

 

Nevertheless, sideways volatility is expected to continue until the market decides which way it wants to go, as prices continue to be whipsawed, going no where technically, as bearish fundamentals remain only limiting factors, Kleist adds.

 

Technical analysts say futures are still in a choppy trading range on the daily bar chart. The next upside price objective for the July future is closing prices above this month's high of US$6.11. A close back below technical support at this month's low of US$5.75 1/2 would provide fresh downside technical momentum.

 

First resistance for July soybeans is seen at US$6.00 and then at US$6.05 - this week's high - and then at US$6.11. First support is seen at US$5.94 - Tuesday's low - and then at US$5.92 1/2.

 

The DTN Meteorlogix Weather Service forecast said Wednesday's weather models are in fair to good agreement. These models continue to feature a weak upper level disturbance over the southern plains during Friday and Saturday and over or just west of the lower Mississippi river valley during Sunday through Tuesday. This feature should be the focus of thunderstorm activity, especially just to its east.

 

In the western Midwest, mainly dry conditions with only a few light showers are on tap for Wednesday and Thursday. Scattered showers, from a trace-0.50 inch are expected during Friday. Temperatures average near to above normal Wednesday, above normal Thursday and Friday. High temperatures during this period should range from the upper 80s to the middle 90s, Meteorlogix said.

 

In the eastern belt, mainly dry conditions with only a few light showers in the northwest are expected during this period. Temperatures will average near normal Wednesday, near to above normal Thursday, and above normal Friday. The highest temperatures will likely range from the upper 80s to the low 90s during this period, Meteorlogix adds.

 

The National Oilseed Processors Association said its members crushed 138.601 million bushels of soybeans in May. The average of analysts' estimates pegged the crush at 133.3 million bushels from a range of estimates that span between 132.3 million and 135.0 million bushels. Soyoil stocks were reported at 2.493 billion pounds compared to the average guess of 2.367 billion from a range of estimates between 2.335 billion to 2.400 billion. The yield on soyoil was 11.77 pounds per bushel. Analysts anticipated the yield to fall between 11.74 and 11.76 pounds per bushel.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Wednesday, cash dealers said. Spot cash soybean bids were down 4-cent in St Louis, Mo., according to cash sources Wednesday.

 

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

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Wednesday on overnight losses in Chicago Board of Trade soybean futures, amid other falling commodities futures. The benchmark September 2006 soybean contract fell RMB17 to settle at RMB2,616 a metric tonne, after trading between RMB2,601/tonne and RMB2,628/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately lower Wednesday, dragged down by losses in other commodity markets, sluggish nearby demand and a stronger ringgit. The benchmark August CPO contract ended at MYR1,452 a metric tonne, down MYR7 from Tuesday, after moving within a narrow range of MYR1,449 and MYR1,457/tonne.