September 20, 2006

 

CBOT Soy Outlook on Wednesday: Seen Up 1-2 cents; e-CBOT, harvest sow downs

 

 

Chicago Board of Trade soybean futures are seen starting Wednesday's day session higher based on overnight indicators, with concerns over harvest delays providing support.

 

In e-CBOT trade, November soybeans were 1 3/4-cent higher at US$5.46 per bushel. Soybean futures are called to open 1 to 2 cents higher.

 

The early positive tonnee is being fueled by weather forecasts projecting significant rain showers moving into the Midwest, which is expected to bog down harvest operations across the crop belt, analysts said.

 

Light technical buying attributed to ideas Tuesday's declines were a bit overdone is expected to add some strength to prices.

 

However, some traders anticipate prices will set back after the opening buying is exhausted, as bearish crop outlooks and ample world supplies remain hindrances to any sustained rallies heading into the heart of the fall harvest.

 

A market technician said Tuesday's close near the session lows allowed November soybeans to regain some downside momentum. It will take a close above technical resistance at the September high of US$5.63 to begin to provide some fresh upside technical momentum. The next major downside price objective for the bears is solid support at last week's contract low of US$5.37 1/2.

 

First resistance for November soybeans is seen at US$5.50 and then at US$5.55 - Tuesday's high. First support is seen at US$5.43 1/2 - Tuesday's low - and then at US$5.37 1/2 - the contract low.

 

The DTN Meteorlogix weather forecast says rain and thunderstorms, will produce 0.50-2.00 inches and locally heavier of moisture in the western belt Thursday into Friday. The eastern Midwest will see scattered to widely scattered thundershowers of 0.25-1.00 inch rains Thursday night or Friday. Temperatures will average below or well below normal Wednesday, near to below normal Thursday and Friday. The lowest temperature readings Wednesday night will range from the upper 30s to the middle 40s, with the coolest readings in the northeast portion of the belt, Meteorlogix reports.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Wednesday. Spot cash soybean bids were down 2 cents in Peoria, Ill., up 4 cents in Evansville, Ind., and up 3 cents in St. Louis, Mo., according to cash sources Wednesday.

 

Rotterdam soybeans and soymeal was lower. European vegoils were mostly lower.

 

In overseas markets, soybean futures traded on China's Dalian Commodity Exchange settled lower Wednesday, pressured by falling prices of imported soybeans, analysts said. The benchmark January 2007 contract settled RMB15 lower at RMB2,542 a metric tonne, after trading between RMB2,537/tonne and RMB2,546/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended sharply lower Wednesday, as falling crude oil prices raised doubts about biodiesel demand. The benchmark December contract ended at the day's low of MYR1,528 a metric tonne, down MYR34.