November 3, 2005

 

CBOT Soy Outlook on Thursday: Flat-Up 2 cents; consolidating in range

  

 

Soybean futures at the Chicago Board of Trade are seen starting Thursday's session with a steady to firmer feel, as the market continues to consolidate within a trading range, analysts said.

 

Analysts call soybeans to open steady to 2 cents per bushel higher.

 

In overnight electronic trade, November soybeans were 1 1/2 cent higher at US$5.75 a bushel, January soybeans were 1 cent higher at US$5.86, December soymeal was US$0.80 higher at US$174.70 and December soyoil was 4 points higher at 22.88 cents per pound.

 

The market has got a lot of the negative news dialed in, and with cash values firming and ideas harvest lows are set, participants really don't want to press the market, said Don Roose, president U.S. Commodities in West Des Moines Iowa.

 

Traders anticipate another choppy, sideways session, with a lack of any surprises from private crop estimates and uneventful weekly export sales data failing to provide much incentive to push the market.

 

Meanwhile, upside potential remains limited, as a general outlook for the government to increase production, cut exports and raise ending stock forecasts in next week's crop report are seen capping upward movement, Roose added.

 

Technical analyst Jim Wyckoff said first resistance for January soybeans is seen at US$5.89 1/2 - this week's high - and then at US$6.00. First support is seen at US$5.78 1/4 and then at US$5.73 - this week's low.

 

Informa released its Nov. 1 U.S. production estimates Thursday, predicting the 2005-06 soybean crop at 3.053 billion bushels, with an average yield of 42.8 bushels an acre. In October, Informa estimated a 3.000 billion bushel soybean crop with a yield of 41.6 bushels per acre, and the U.S. Department of Agriculture estimated a soybean crop of 2.967 billion based on a 41.6 bushel per acre yield.

 

The USDA said Thursday that 2005-06 marketing year sales totaled 761,400 tonnes, with the primary buyer China at 467,100 tonnes. Pre-report estimates ranged from 550,000 to 850,000 tonnes.

 

Net old/new crop soymeal sales were 305,000 tonnes, a figure well above estimates that ranged from 100,000 to 200,000 tonnes. Net sales of 4,700 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 3,000 to 9,000 tonnes.

 

The U.S. Census Bureau released its revised soyoil stocks figure for September, pegging stocks at 1.691 billion pounds. Soyoil stocks were estimated at 1.690 billion in last week's Census crush report.

 

South Korea's Nonghyup Feed Inc., or NOFI, bought 25,000 metric tonnes of Indian soymeal from trading house Bunge in a tender concluded Thursday, a trader in Seoul said.

 

A total of 147 delivery notices were posted against the November soybean contract, with the house accounts at Term Commodities and ADM Investor Services stoppers of 50 and 36 lots respectively. The last date assigned was October 28.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled mostly lower in range-bound trading Thursday, in line with a fall in CBOT soybeans. The benchmark May 2006 soybean contract lost RMB4 to settle at RMB2,765 a metric tonne, after trading in a tight range of RMB2,759-RMB2,771/tonne.

 

Markets in Malaysia, are closed Thursday and Friday for religious festivals.