October 24, 2006

 

CBOT Soy Outlook on Tuesday: Flat up 1 cent; following e-CBOT price action

 

 

Soybean futures at the Chicago Board of Trade are seen starting Tuesday's session steady to firm, following the overnight theme amid the absence of fresh fundamental influences.

 

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

 

In e-CBOT trade, November soybeans were 1/2-cent higher at US$6.18 while January was unchanged at US$6.30 1/2 per bushel.

 

A quiet news front will once again keep technical considerations in play, with traders eyeing speculative fund activity amid its relentless pursuit of pushing prices to the upside during the past week, analysts said.

 

Carryover technical momentum is expected to be a supportive feature, with the market targeting overhead resistance as near term objectives. Traders are unwilling to press prices with speculative fund buying continuing to surface on price breaks, analysts added.

 

A technical analyst said Monday's close at a fresh three-month high and bullish outside day up on the daily bar chart in January futures presented the market with solid upside technical momentum. However, the market is still overdone on the upside and due for a decent corrective pullback soon, he added. The next upside price objective is to close prices above solid chart resistance at US$6.50. The next downside price objective is closing prices below solid support at US$6.00.

 

First resistance for January soybeans is seen at Monday's high of US$6.31 1/2 and then at US$6.35. First support is seen at US$6.25 and then at US$6.20.

 

U.S. Department of Agriculture reported Monday that 76% of the 2006 U.S. soybean crop was harvested as of October 22. The harvest pace lags the five-year average of 78%. Analysts anticipated a harvested figure between 77% and 81%.

 

"The overall pace of harvesting is about average, but rains have tempered the forward progress of harvesting in Indiana and Ohio," said John Kleist, analyst with Top Third Ag Marketing in Chicago.

 

In Indiana, 58% of the crop was harvested, compared with 49% last week and the five-year average of 77%. Ohio's soybean crops were reported 53% harvested, up from last week's 42%, but well below the five-year average of 74%.

 

The DTN Meteorlogix weather forecast says rainfall and cold temperatures will further delay the crop harvests over the eastern portion of the belt during the next few days, especially over Indiana and Ohio.

 

Mainly dry conditions are on tap for the eastern Midwest Tuesday and most of Wednesday. Rain and thunderstorms are seen for Wednesday night, Thursday and early Friday. The heaviest of this activity may favor the south and east areas of the belt. Mainly dry conditions are seen for Saturday. Temperatures will average below normal during this period, Meteorlogix reports.

 

U.S. Midwest cash soybean basis bids are mostly unchanged Tuesday. Spot cash soybean bids were up 4 cents in Sioux City, Iowa, up 6 1/2 cents in Peoria, Ill., and up 6 cents in St. Louis, Mo., according to cash sources Tuesday.

 

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

 

In overseas markets, soybean futures on China's Dalian Commodity Exchange settled mostly higher, supported by Monday's gains in CBOT soybean futures, analysts said. The benchmark January 2007 contract rose RMB11 to settle at RMB2,581 a metric tonne, after trading between RMB2,572/tonne and RMB2,587/tonne.