July 6, 2006

 

CBOT Soy Outlook on Thursday: Up 1-2 cents; e-CBOT, weather concerns

 

 

Soybean futures on the Chicago Board of Trade are seen starting Thursday's open auction session firmer, following the overnight theme, with forecasts pointing to warmer and drier for next than were projected Wednesday an underpinning feature.

 

Soybeans are called to open 1 to 2 cents higher.

 

In overnight electronic trade, July soybeans were 2 3/4 cents higher at US$5.97 1/4, November soybeans were unchanged at US$6.21, while December soymeal was US$1.10 higher at US$179.80 and December soyoil was 2 points lower at 27.36 cents per pound.

 

The market remains at the mercy of the latest weather forecasts, and volatile action will continue until the crops move past their critical growth stages, said a CBOT commission house broker.

 

Private forecasters are pushing back moisture previously seen moving into the region early next week, but temperatures will remain non-threatening and may limit upside movement, analysts said.

 

With corn moving through its key pollination period, soybeans may be influenced by movement in corn, with traders watching soyoil for possible strength with volatility in crude oil futures, traders added.

 

Market technicians said soybean futures still have some upside technical momentum following Wednesday's declines, and November soybeans would gain better upside technical momentum by producing a close above solid resistance at Monday's high of US$6.32. The next major downside price objective for the market is filling last Friday's upside price gap on the daily bar chart - meaning pushing prices below US$6.12 1/2.

 

First resistance for November soybeans is seen at US$6.25 and then at US$6.28 1/2 - Wednesday's high. First support is seen at US$6.17 - Wednesday's low - and then at US$6.15.

 

The DTN Meteorlogix Weather Service forecast said Thursday's US and European models are in fair to good agreement during the next 5 days. Any significant upper level ridging will be mainly confined to the Atlantic or the southern plains, although there is also a weak to moderate ridge over the northern plains. The models are in only fair agreement during days 6 to 10, Meteorlogix said.

 

Meteorlogix's forecast calls for favorable crop conditions across the Midwest in the next five-days. The 6-10 day outlook projects above normal temperatures and near to below normal precipitation for the western Midwest while the eastern belt has near- to above-normal temperatures and near to below normal rainfall over the same period, Meteorlogix said.

 

In deliveries, a total of 1,635 delivery notices were redelivered against the July soybean future. The last trade date assigned was July 5. A total of 201 delivery notices were posted against July soyoil. The principle stoppers were the house account at ADM Investor Services with 111 lots and the house account at Bunge Chicago with 40 lots. The last trade date assigned was June 27. 235 delivery notices were posted against the July soymeal contract, with the house account at ADM Investor Services stopping 170 lots. The trade date assigned was June 28.

 

Meanwhile, the U.S. Department of Agriculture's weekly grain inspections data for the week ended June 29 will be released after 11 a.m. EDT (1500 GMT). The report, normally released Mondays, was delayed due to server problems. Analysts anticipate the inspections will fall within a range of 6 million to 12 million bushels.

 

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

 

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

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Thursday on weak domestic demand and overnight losses in Chicago Board of Trade soybean futures, analysts said. The benchmark September contract fell RMB14 to settle at RMB2,568 a metric tonne, after trading between RMB2,565 and RMB2,575/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday, lifted by strong gains in other commodity markets, particularly crude oil. The benchmark September CPO contract ended at MYR1,498 a metric tonne, up MYR11 from Wednesday.