November 4, 2005

  

CBOT Soy Outlook on Friday: Down 1-2 cents; following overnight theme

  

 

Soybean futures on the Chicago Board of Trade are seen starting Friday's session a tad easier based on overnight price action amid ideas Thursday's spike in prices were a bit overdone.

 

Analysts call soybeans to open 1 to 2 cents per bushel lower.

 

In overnight electronic trade, November soybeans were 2 3/4 cents lower at US$5.89 a bushel, January soybeans were 1 1/4 cent lower at US$6.00 1/2, December soymeal was US$0.10 higher at US$178.40 and December soyoil was 11 points lower at 23.42 cents per pound.

 

Light profit taking from Thursday's gains may apply early pressure to prices, but the market has the potential to extend its gains based on technical factors and ideas bearish inputs have been adequately factored into prices, analysts said.

 

The ability of the most active January futures to settle above the key resistance Thursday is seen as supportive, but traders will be watching for signs of buying exhaustion for a clue to early direction.

 

Nevertheless, the market remains caught in trading range with the potential for a pick up in farmer selling seen capping upside momentum. Weakness in the energy sector is seen tempering advances in soyoil and may take the edge off soybean prices as well, said a CBOT commission house broker.

 

Technical analyst Jim Wyckoff said Thursday's close above major psychological resistance at US$6.00 provides market bulls with some fresh upside technical momentum, and a close above the October high of US$6.11 would strongly suggest a harvest low is in place and that prices will trend at least sideways if not higher in the coming weeks.

 

First resistance for January soybeans is seen at US$6.02 1/2 - Thursday's high - and then at US$6.11. First support is seen at US$5.95 and then at US$5.89 - Thursday's low.

 

A total of 470 delivery notices were posted against the November soybean contract, with the house accounts at Term Commodities issuing 457 lots and ADM Investor Services stopping 356 lots. The last date assigned was November 1.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled higher on moderate speculative buying, thanks to a surge in Chicago Board of Trade soybeans. The benchmark May 2006 soybean contract rose RMB37 to settle at RMB2,802 a metric tonne, after trading between RMB2,785-RMB2,819/tonne.

 

Markets in Malaysia, are closed Friday for religious festivals.

 

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