October 28, 2005

 

CBOT Soy Outlook on Friday: Flat to lower; settling into trading range

 

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's session with a steady to lower theme, as the market settles into a trading range amid the absence of fresh fundamental news, traders said.

 

Analysts call soybeans to open flat to 1 cent per bushel lower.

 

In overnight electronic trade, November soybeans were 1/2 cent lower at $5.70 1/2 a bushel, January soybeans were 1/4 cent lower at $5.83 1/4, December soymeal was $0.50 lower at $170.00 and December soyoil was 4 points higher at 23.42 cents per pound.

 

A quiet news front has failed to provide market participants with near term direction, leaving futures in a choppy, range bound pattern, analysts said.

 

The market has seemingly found a comfort level, with outlooks for larger crop estimates and heavy deliveries overhanging prices while lingering concerns over South American plantings and seasonal buying patterns underpinned.

 

Otherwise, traders expect the rolling and liquidation of November futures ahead of first notice day, Monday is seen as a featured attraction.

 

Technical analyst Jim Wyckoff said prices are still in the middle of a trading range between the October high and the October low, with market bears still holding the overall technical advantage. A close above major psychological resistance at $6.00 would provide market bulls with fresh upside technical momentum, while a close back below this week's low of $5.66 1/2 would suggest a retest of the recent low, or below, he added.

 

First resistance for November soybeans is seen at $5.75 - Thursday's high - and then at $5.78 1/2. First support is seen at $5.70 - Thursday's low - and then at $5.66 1/2.

 

In demand news, Taiwan's Breakfast Soybean Procurement Association in Kaohsiung rejected all offers for U.S. soybeans in a buy tender concluded Friday. Seoul-based Korea Feed Association bought 110,000 metric tonnes of South American soymeal for Feb-April delivery from trading house Cargill Friday.

 

China's soybean imports rose 29% on year in September to 1.87 million metric tonnes, the General Administration of Customs said Friday. In the January to September period, soybean imports rose 40% to 19.5 million tonnes. The country also imported 117,538 tonnes of soyoil in September.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled mostly lower in range-bound, pre-weekend trade. The benchmark May 2006 contract edged down RMB1 to settle at RMB2,741 a metric tonne Friday, after trading in a narrow range of RMB2,735-RMB2,749/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended marginally lower Friday after a lackluster, range-bound trading day as participants stayed on the sidelines ahead of long holidays in the coming days. The benchmark January CPO contract ended at MYR1,431 a metric tonne, down MYR4 from Thursday.

 

Rotterdam soybeans were mixed and soymeal prices were flat to higher, European vegoils were mixed.