September 15, 2006

 

CBOT Soy Outlook on Friday: Steady up 2 cents; e-CBOT, weather concerns

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's day session activity steady to firm, in line with the overnight theme, with lingering concerns over early frosts and technical buying providing initial support.

 

In e-CBOT trade, November soybeans were 3 cents higher at US$5.48 1/4 per bushel. Soybean futures are called to open steady to 2 cents higher.

 

A quiet news front has traders eyeing overnight activity for opening indicators with end of the week position evening expected with talk of a frost in the northern Midwest next week potentially causing some scattered crop problems, analysts said.

 

Meanwhile, firm cash prices continue to generate underlying support, but traders anticipate choppy action will unfold during the day, as bearish fundamentals will limit upside potential. Nevertheless, with futures hovering just above contract lows, many participants are leery of aggressively pressing prices at these levels, traders added.

 

Seasonality studies show soybean prices bottoming out in the October time frame and then working higher into the end of the year, said a technical analyst. Despite a recent bounce in prices, the market still has bearish momentum, he added. It will take a close above technical resistance at the September high of US$5.63 to begin to provide November futures with some fresh upside technical momentum. The next major downside price objective for November soybeans is solid support at US$5.25.

 

First resistance for November soybeans is seen at US$5.47 1/2--Thursday's high--and then at US$5.50. First support is seen at US$5.41--Thursday's low--and then at US$5.37 1/2--the contract low--and then at US$5.35.

 

The DTN Meteorlogix weather forecast says scattered showers and thunderstorms, 0.30-1.25 inch and locally heavier are on tap for the eastern belt from Sunday night into Monday. A chance for light rain or drizzle through northwest locations of the Midwest is expected during this time. Mainly dry and windy conditions are seen for Tuesday. Temperatures will average below or much below normal during this period. The lowest temperatures either Tuesday or Wednesday mornings will likely be in the 30s through South Dakota, Minnesota and central Wisconsin. A chance for readings in the 30s Fahrenheit in northern Iowa and northwest Illinois are expected during this time as well, Meteorlogix reports.

 

In deliveries, a total of 188 delivery notices were posted against September soybean futures. A customer account at RJ O'Brien stopped 178 of the notices. The last trade date assigned was September 14. In soymeal, a total of 98 delivery notices were posted against the September contract, with the house account at ADM Investor Services stopping all the notices. The last trade date assigned was September 14.

 

U.S. Department of Agriculture said private exporters reported the sale of 22,000 metric tonnes of U.S. soyoil to China for delivery in the 2006-07 marketing year.

 

In news, China's soyoil imports in the January-August period fell 19.3% on year to 920,000 metric tonnes, the General Administration of Customs said Friday. In August alone, soyoil imports totaled 60,000 tonnes, preliminary customs data showed. India raised the base import price of crude soyoil by US$1 a metric tonne to US$580/tonne Friday, while keeping the base import prices of palm oils unchanged.

 

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

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Friday on profit-taking amid weak market sentiment, analysts said. The most active January 2007 contract settled RMB4 lower at RMB2,552 a metric tonne, after trading between RMB2,548 and RMB2,560/tonne. Crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Friday as late speculative buying helped offset pressure from weak export data and declines in crude oil prices. The benchmark November contract ended at MYR1,537 a metric tonne, unchanged from Thursday after moving within a narrow range of MYR1,528-MYR1,538/tonne.