June 23, 2006

 

CBOT Soy Outlook on Friday: Flat-down 1 cent; favorable growing conditions

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's session a touch lower, in tune with overnight action, as the absence of threatening weather provide favorable growing conditions.

 

Soybeans are called to open flat to one cent lower.

 

In overnight electronic trade, July soybeans were 1/2-cent lower at US$5.82 1/2, November soybeans were 3/4-cent lower at US$6.08, July soymeal was US$1.10 lower at US$175.40 and July soyoil was 5 points lower at 24.44 cents per pound.

 

A quiet news front coupled with favorable weather conditions and the absence of support from outside inflationary markets is laying the ground work for another choppy, lower grinding session, said a CBOT commission house broker.

 

Sideways actions is expected to remain in vogue Friday, with current weather patterns keeping pressure on prices, while the uncertainty of long term conditions, particularly with the critical development stage of soybean development not until August keeping some risk premium in the market, analysts said.

 

Meanwhile, traders expect Monday's crop ratings will show signs of improvement and keep a lid on upside potential. Otherwise, the rolling of July positions and the expiration of July options will be featured attractions, traders add.

 

The DTN Meteorlogix Weather Service forecast said Friday's U.S. and European models are in good agreement. An overall pattern of a ridge in the west, trough in the east will dominate the U.S. during the next 10 days. This pattern will tend to favor more shower activity in the eastern Midwest than in the west however all areas of the Midwest will see periods of scattered showers. There is no significant heat in this pattern for the Midwest with the ridge in the western U.S. This lack of heat will continue to favor developing corn despite some dry areas in the central and western Midwest.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Friday, cash dealers said. Spot cash soybean bids were up 1-cent in Quincy, Ill., and down 1-cent in St. Louis, Mo., according to cash sources Friday.

 

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 lower Friday on a lack of supportive news, along with overnight losses in Chicago Board of Trade soybean futures. The benchmark September 2006 soybean contract fell RMB7 to settle at RMB2,602 a metric tonne, after trading between RMB2,600 and RMB2,609/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended moderately higher Friday after a choppy, directionless trading day. The benchmark September CPO contract ended at MYR1,468 a metric tonne, up MYR5 from Thursday.