October 31, 2005

 

CBOT Soy Outlook on Monday: Weaker on lack of bullish news

  

 

Soy complex futures at the Chicago Board of Trade are called to open steady to weaker Monday, as a general lack of positive inputs is expected to weigh on trade.

 

Soybeans are called to open steady to 2 cents weaker.

 

November soybeans were weaker in e-cbot trade, down 1 1/4 cents a bushel to US$5.63 3/4. December soymeal fell 50 cents to US$168.30 a short tonne and December soyoil slid 13 points to 23.20 cents a pound.

 

"We'll be lucky to consolidate today," said John Kleist, president of Kleist Ag Consulting.

 

He said weather in South America is generally favorable for soybeans, and worries about bird flu could weigh on trade.

 

Meteorlogix said rainfall from Parana northward favors early planted soybeans, while drier weather in Rio Grande Do Sul helps to improve conditions for field work in preparation for planting soybeans and corn. The private weather firm also notes no significant concerns for the final U.S. harvest efforts at this time. In Monday afternoon's crop progress report from the U.S. Department of Agriculture, soybean harvest is seen around 95% done.

 

Soybean deliveries totaled 800 contracts. Standout issuers include the customer account of ABN Amro issuing 220 contracts and the house account of ABN Amro issuing 309 contracts. R.J. O'Brien issued 268 contracts. Major stoppers include the house account of UBS Securities, which stopped 121 contracts. Man Financial stopped 129 contracts and the customer account of ABN Amro stopped 105 contracts.

 

In other news, on Monday India raised the base import prices for palm oils by US$2-US$8 a metric tonne, but cut the price for crude soybean oil by US$5/tonne, which could underpin soyoil prices. Despite the price changes, soyoil base import prices remain above palm oil.

 

The European Commission Monday said samples taken from poultry on a Greek island off the Turkish coast have come back negative for bird flu. Meanwhile, in Vietnam, authorities in a northern province culled 400 poultry over the weekend after about 800 birds from 20 backyard farms died en masse, an official said Monday. The official said the poultry were culled even though the dead birds tested negative for the H5N1 strain of bird flu.

 

Technical analyst Jim Wyckoff said after November soybeans set a three-week low on Friday, "bears have fresh near-term technical power heading into the new trading week. A challenge of the October low of US$5.54 1/2, or just below, is now likely in the near term," he said. He puts first resistance at US$5.70 and then at US$5.75, with first support at Friday's low of US$5.63 1/4 and then at US$5.60.

 

In overseas exchange news, crude palm oil futures on the Bursa Malaysia Derivatives rose, boosted by late short covering. January ended at MYR1,445 a metric tonne, up MYR14. Markets in Malaysia will be closed Tuesday, Thursday and Friday for religious festivals.

 

Most soybean futures on the Dalian Commodity Exchange settled slightly lower in lackluster trading. The benchmark May contract lost RMB3 to settle at RMB2,738 a metric tonne.

 

Rotterdam soybean and soymeal prices are weaker. European vegoil prices were mixed to firmer.