October 6, 2006

 

CBOT Soy Outlook on Friday: Steady-down 1 cent; pre-weekend consolidation

 

 

Chicago Board of Trade soybean futures are called to open steady to lower, in tune with overnight price action, as traders anticipate the market will consolidate after recent gains.

 

Soybean futures are called to open flat to 1-cent lower.

 

In e-CBOT trade, November soybeans were 1-cent lower at US$5.64 1/2 per bushel.

 

The market is set to drift lower on the opening, as traders square a few positions following recent price strength as participants gear up for an active harvest weekend in the Midwest, analysts said.

 

A quiet news front will keep traders eyes on fund activity as well as movement in other markets for clues to near term direction, a CBOT commission house broker added. Nevertheless, outlooks for record production and ample nearby supplies are as bearish features to press prices unless speculative buyers return to boost prices, traders add.

 

A market technician said technical odds are now higher that a harvest low is in place and prices can begin to work higher into the end of the year following Thursday's price strength. It will take a close above technical resistance at US$5.75 basis November soybeans to provide better upside technical momentum. The next downside price objective is closing prices below solid support at US$5.50.

 

First resistance for November soybeans is seen at Thursday's high of US$5.67 and then at US$5.70. First support is seen at US$5.60 and then at today's low of US$5.55.

 

The DTN Meteorlogix weather forecast says a more favorable period for harvest activities is on tap for the next 5 days in the U.S. Midwest. After that this warm dry period, wet and then cold weather may emerge to cause problems in the eastern and southern locations of the Midwest, Meteorlogix reports.

 

In the western Midwest, mainly dry conditions are seen for Friday and Saturday, with only a few light showers possible Sunday. Temperatures will average near to above normal Friday, and above normal Saturday and Sunday. There is a chance for a few light or locally moderate showers through southern areas Monday. In the eastern belt, mainly dry conditions are in store for Friday through Sunday. Temperatures will average below normal Friday, near to above normal Saturday, and above normal Sunday. A dry outlook with possibly only a few light showers are seen for Monday and Tuesday, Meteorlogix reports.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Friday. Spot cash soybean bids were down 1-cent in Keokuk, Iowa, up 9 cents in Bloomington, Ill., and down 6 cents in Decatur, Ind., according to cash sources Friday.

 

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

 

In overseas markets, crude palm oil futures on the Bursa Malaysia Derivatives ended mixed Friday after a choppy trading day as the market continued to mirror the movement of crude oil prices, traders said. The benchmark December contract ended at MYR1,542 a metric tonne, up MYR5 from Thursday.