September 1, 2006

 

CBOT Soy Outlook on Friday: Steady up 1 cent, following overnight theme

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's day session activity steady to firm, based off overnight indicators amid an absence of fresh fundamental news.

 

Soybeans are called to open steady to 1-cent higher.

 

In e-CBOT trade, November soybeans were 1/4-cent higher at US$5.56 per bushel.

 

Trade positioning ahead of the extended holiday weekend is expected to promote a choppy, sideways session with light short covering a possibility, analysts said.

 

CBOT markets will be closed Monday in observance of the Labor Day Holiday.

 

However, traders say bearish market fundamentals will cap upside potential, as beneficial near term crop conditions and ample domestic and world inventories remain a thorn in the side of market bulls head toward the fall harvest season.

 

A market technician said bearish momentum still has technical control of the market. The next downside price objective for November soybeans is closing prices below solid technical support at US$5.50. It will take a close above technical resistance at US$5.70 to begin to provide some fresh upside technical momentum.

 

First resistance for November soybeans is seen at US$5.56 3/4--this week's high--and then at US$5.60. First support is seen at US$5.50 and then at US$5.45.

 

The DTN Meteorlogix forecast said scattered showers and thundershowers are expected from western Iowa westward into Nebraska, South Dakota and western Minnesota during a 3-day period. This activity may be locally heavy. The eastern portion of the western corn belt will see only light showers developing during the weekend period. The eastern Midwest will remain mainly dry during this time. Temperatures will average near normal in the western belt and below normal in the eastern belt Friday. Near to below normal temperatures are on tap for Saturday, with below normal temps in the western Midwest and near normal in the east on Sunday.

 

In deliveries, a total of 1,654 delivery notices were posted against the September soybean future. No significant issuers or stoppers were reported. The last trade date assigned was August 31. 81 delivery notices were posted against the September soymeal contract. A customer account at Tenco stopped 7 lots. The last trade date assigned was July 31. 864 delivery notices recirculated against September soyoil. The last date trade assigned was August 31.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Friday. Spot cash soybean bids were up 5 cents in Peoria Ill., and up 12 cents in Evansville, Ind., according to cash sources Friday.

 

Meanwhile, Allendale Inc., a research and brokerage firm located in McHenry, IL released crop estimates from its 17th annual 2006 Farmer Crop Survey. The firm pegged soybean production at 3.109 billion bushels based on harvested acreage of 73.94 million acres with a yield of 42.05 bushels an acre.

 

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

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled higher Friday on improved domestic demand. The most active January 2007 contract settled RMB12 higher at RMB2,555 a metric tonne, after trading between RMB2,550/tonne and RMB2,559/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Friday, pushed by soyoil strength, supportive export data and budget hopes, as the market sprang back to life following the National Day holiday yesterday. The benchmark November contract ended up MYR12 at a week-high MYR1,590 a metric tonne.