September 7, 2006

 

CBOT Soy Outlook on Thursday: Seen lower, e-CBOT, bearish fundamentals

 

 

Overnight electronic trading indicators are pointing to a lower day session opening for Chicago Board of Trade soybean futures, as bearish underlying fundamentals and a weak technical presence casts a defensive cloud over the market, analysts said.

 

Soybeans are called to open 1/2 to 1-cent lower.

 

In e-CBOT trade, November soybeans were 1-cent lower at US$5.45 3/4 per bushel.

 

The absence of fresh fundamental support in the market coupled with poor technical action and large crop outlooks are not providing any incentive for buyers to step in front of price weakness, said a CBOT commission house broker.

 

However, traders anticipate some market consolidation to emerge heading into the weekend, but without any fundamental strength upside moves remain hindered, traders added.

 

A technical analyst said Wednesday's close nearer the session low and below solid support at US$5.50 a bushel basis November is keeping bearish momentum in technical control. The next downside price objective is support at US$5.25. 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$5.50 and then at US$5.55. First support is seen at US$5.46 - Tuesday's low - and then at US$5.40.

 

The DTN Meteorlogix forecast said mainly dry conditions are on tap for the U.S. Midwest Thursday, with a chance for light showers in the northern belt during Friday. There is a chance for light to moderate showers and thundershowers through the central and southern portion of the western belt and the northwest portion of the eastern belt Saturday and Saturday night. The rainfall in these areas should average 0.30-1.50 inches. Temperatures will average above normal today, below normal north and above normal south Friday and Saturday.

 

In deliveries, a total of 2,105 delivery notices were posted against the September soybean future. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was Sept. 6. 329 delivery notices recirculated against September soyoil. The last date trade assigned was Sept. 6. In soymeal, 81 delivery notices were posted against the September contract. The last trade date assigned was August 30.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Thursday. Spot cash soybean bids were up 2 cents in Central Ill., down 1-cent in Decatur Ind., and up 1-cent in St. Louis MO, according to cash sources Thursday.

 

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

 

U.S. Department of Agriculture's weekly export sales report normally released on Thursday is delayed until Friday 7:30 a.m. CDT due to Monday's Labor Day holiday.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Thursday, pressured by overnight losses on the Chicago Board of Trade, analysts said. The most active January 2007 contract settled RMB19 lower at RMB2,546 a metric tonne, after trading between RMB2,536/tonne and RMB2,559/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Thursday after another choppy, uneventful trading day as participants continued to bide time until the release of key supply and demand data in the coming week. The benchmark November CPO contract ended at MYR1,570 a metric tonne, up MYR8 from Wednesday.